Keurig case
Keurig: Convenience, Choice, and Competitive Brands
In 1990, John Sylvan and Peter Dragone entered the coffee brewing industry by launching their company Keurig built upon on the question of, “why do we brew coffee by the pot when we only drink it by the cup?” Within a few years after their start-up, they were able to secure multiple patents as well as acquiring $1 million from venture capitalists to improve upon their prototype. By 1998, Keurig, which is German for excellence, was finally able to launch their first industrial strength, single-serve machine delivering a perfect cup of coffee every time. Keurig was lucky to join the coffee market at the dawn of its explosion, when consumers’ wants and needs began to shy away from traditional coffee pot brewing and shifted more towards a single cup of premium, gourmet roasted coffee.
As the coffee market continued to grow, it exhibited two trends. First being the “mainstreaming” of specialty coffees and secondly, only brewing one cup of it at a time. Keurig focused its efforts towards adapting to these changes by dramatically boosting innovation, technology, and their R&D department. Keurig changed the game in the single cup sector by introducing their patented K-Cup and partnering with Green Mountain Coffee Roasters (GMCR). These were tiny plastic cups that contained the coffee grounds already within the filter and sealed with an aluminum lid. All the consumer then has to do is place the cup within the Keurig machine (without removing the aluminum), close the lid and press a button, and in less than a minute, a fresh cup of coffee awaits. From the time of its launch in 1998, Keurig offered only 8 varieties of GMCR coffee and by the early 2000’s consumers had the choice of over 200 varieties from 30 different brands.
When it comes time that Keurig’s patents will expire, competition will skyrocket, so it is extremely important that they pay close attention to their competitors’ moves. After an
In 1990, John Sylvan and Peter Dragone entered the coffee brewing industry by launching their company Keurig built upon on the question of, “why do we brew coffee by the pot when we only drink it by the cup?” Within a few years after their start-up, they were able to secure multiple patents as well as acquiring $1 million from venture capitalists to improve upon their prototype. By 1998, Keurig, which is German for excellence, was finally able to launch their first industrial strength, single-serve machine delivering a perfect cup of coffee every time. Keurig was lucky to join the coffee market at the dawn of its explosion, when consumers’ wants and needs began to shy away from traditional coffee pot brewing and shifted more towards a single cup of premium, gourmet roasted coffee.
As the coffee market continued to grow, it exhibited two trends. First being the “mainstreaming” of specialty coffees and secondly, only brewing one cup of it at a time. Keurig focused its efforts towards adapting to these changes by dramatically boosting innovation, technology, and their R&D department. Keurig changed the game in the single cup sector by introducing their patented K-Cup and partnering with Green Mountain Coffee Roasters (GMCR). These were tiny plastic cups that contained the coffee grounds already within the filter and sealed with an aluminum lid. All the consumer then has to do is place the cup within the Keurig machine (without removing the aluminum), close the lid and press a button, and in less than a minute, a fresh cup of coffee awaits. From the time of its launch in 1998, Keurig offered only 8 varieties of GMCR coffee and by the early 2000’s consumers had the choice of over 200 varieties from 30 different brands.
When it comes time that Keurig’s patents will expire, competition will skyrocket, so it is extremely important that they pay close attention to their competitors’ moves. After an