Single-cup coffee machines driving market these days

Have we forgotten how to make real coffee!!

 If you got one of those single-cup coffee machines for Christmas this year, you are right in style.

Between K-Cups and bean prices, retail coffee sales jumped 17 percent, to $7 billion in 2011, according to Packaged Facts, a market research firm.

There are four reasons why we are paying higher prices for coffee these days: rising prices for “green” (raw) coffee beans that have been passed along the entire distribution chain; the "premiumization" of coffee; the nation's still-growing thirst for specialty coffee beverages; and the phenomenal growth of single-serve coffee packet formats.

There was a bit of good news for consumers, even though we didn’t realize it. The Food Institute “estimates that wholesale coffee prices rose 18 percent for the first nine months of 2011, while retail prices only increased 13.5 percent because retailers did not pass along all of these higher costs to consumers,” according to Packaged Facts.

High voltage “regular” coffee makes up nearly 60 percent of the market. The single-cup style of coffee, which was hardly a blip on the market five years ago, now makes up 7.5 percent of retail coffee sales.

“Single-serve portion packs typically cost 65 cents to a dollar, making them considerably more expensive than brewing the same brand of coffee from loose grounds, but still less than buying a comparable beverage in a coffeehouse,” the research company said.

A September survey by Packaged Facts found 21 percent of households that make coffee – other than instant – at home own an electric single-cup coffeemaker (such as pods, K-Cups, or T-Discs), and 18 percent use it regularly.

This single-serve market in the U.S. is dominated by Green Mountain Coffee Roasters with its Keurig K-Cup brewing system. But others have taken note. Last year Dunkin' Donuts and Starbucks launched single-cup coffee formats.