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Walt Churchill and assistant manager Kunal Dawar view the K-Cups display at Walt Churchill's Market in Monclova Township. 'K-Cups, they're pretty hot right now," Mr. Dawal says. THE BLADE/ANDY MORRISON Enlarge
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Published: 9/8/2011 - Updated: 8 months ago


K-Cups capture local taste

Area part of trend to 1-serving coffee making

BY JON CHAVEZ
BLADE BUSINESS WRITER

K-Cups, single-serve portions of hot beverages such as coffee and tea that are designed to work with a special one-cup brewing machine, are becoming a sizzling hot product with Toledo-area people, retailers say.

The products, which are sold in a variety of brands -- including popular names such as Caribou Coffee, Dunkin Donuts, Folger's, and Celestial Seasonings -- are about to get even hotter in November when Starbucks plans to sell its coffee varieties in K-Cup formats.

"Based on amount of volume, we've never seen anything sell as fast as these K-Cups. It's unbelievable, just unbelievable," said John Lincoln, a sales representative with Toledo food broker Harold M. Lincoln. His company, which is a local representative for K-Cup manufacturer Green Mountain Coffee Roasters, sells food products to wholesalers who in turn sell to stores.

Green Mountain is a leading distributor of K-Cups in the $2 billion single-cup coffee market, selling its own brands but also distributing other branded single portions including Emeril's and Timothy's. The "K" in K-Cups refers to Keurig brand coffee brewing machines, which pour hot water through the powder-filled cups to produce hot coffee, tea, chocolate, and cider.

Keurig, which became a subsidiary of Green Mountain in 2008, introduced its single-cup brewing system in 1998. The system has skyrocketed in the last three years, leading other manufacturers to introduce their own brewing machines last year.

Charles Williams of Sylvania Township bought his machine two years ago and was the second among his circle of friends to own one.

"I like it very much. It's very convenient," Mr. Williams said yesterday while shopping for K-Cups at the Bed, Bath & Beyond store on Monroe Street.

"I keep decaf coffee, regular, and extra bold. I happen to like my coffee very strong, and if I have friends or visitors who don't like it quite so strong, it's useful to be able to switch strengths to meet the individual needs."

Joe DeRupo, spokesman for the National Coffee Association of USA Inc., based in New York, said recent research by his industry group shows the surge in the single-serve concept.

K-Cup use is growing at 1 percent annually, but growth in awareness is much higher, the association maintains.

Surveys this year found that 73 percent of those questioned were aware of the single-serve concept, compared with 55 percent in 2007. Also, ownership of the brewing machines has jumped to 7 percent of coffee drinkers this year, compared to 1 percent in 2005.

Mr. Lincoln, the local food broker, said it's the economics of the single-serve concept that appear to be pushing the increased demand.

"It comes out to about 60 cents for a cup of coffee -- and you never have to throw a cup out," he said.

Many retailers in the Toledo area sell the single-serve brewing machines, and more grocers say they are carrying the K-Cup portion packs to satisfy growing customer demand.

"K-Cups, they're pretty hot right now. They've been doing really well," said Kunal Dawar, a product buyer and assistant manager at Walt Churchill's Market.

Sales of the product at the grocery stores jumped last year and this year, Mr. Dawar said. The grocer carries 20 such products, he said.

Kroger Co. stores plan to add Starbucks K-Cups to their shelves the first day they become available, said company spokesman Amy McCormick, who said the product has evolved into a big seller for the nation's largest traditional grocery chain, based in Cincinnati.

"Some of the research we've found shows that single-serve now accounts for one in every five cups of coffee served in the U.S., so it's big," she said. "We've had a 50 percent increase in K-Cup sales in the last year from 2010."

Contact Jon Chavez at: jchavez@theblade.com or 419-724-6128.



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