Why Big Coffee Is Betting On Single-Serve Cups

The Keurig machine--that handy gadget that produces one perfectly portioned cup of coffee--has 37 patents. Two of those integral patents expire this September, opening the simple but legally exclusive technology behind K-Cup coffee pods to retailers that want to produce their own, cheaper versions. Keurig's parent company, Green Mountain Coffee Roasters, prepared a two-pronged defense: Partner with popular coffee companies (such as Folgers and Dunkin' Donuts) to make branded K-Cups, and introduce the Vue, a new, fancy espresso machine that comes complete with a Starbucks alliance. To understand how important this is to Green Mountain--and how attractive it is to everyone else--just look at the rapid growth of single-serve revenue.