Viewpoint: Private brands brewing up new ideas for coffee pods
If we had to choose one instance of private brands taking an original idea and running with it to make it even more innovative, single-serve coffee pods would have to be it.
Until 2012, beverage brewing system manufacturer Keurig largely had the market in the United States on both single-serve brewers for home use and the coffee pods used in them, thanks to a proprietary patent. But once that patent expired, retailers were waiting in the wings, ready to caffeinate and inspire the estimated one in four Americans the National Coffee Association says own a single-serve machine.
The introduction of single-serve coffee and the explosive growth that resulted is a great example of how product innovation can truly transform a category. Single-serve remains the best-performing category not only in coffee, but also in hot drinks in general. Innovation in the category, including by private brands, now reaches beyond coffee into a variety of other beverages including lattes, tea, coffee and tea blends, and cocoas. One health and wellness retailer has even introduced a pod for cold and flu medication.
It’s not just what goes in the cup where private brands are innovating, but also the cup itself. Keurig has received a lot of heat for its plastic cups, and consumers are more aware of their environmental impact so sustainability is high on the minds of retailers. Some private brands are using pods that are biodegradable or compostable. Others are using recyclable plastics and emphasizing the ease of recycling the cup right on the front of the package.
Using coffee, tea and other ingredients that are fair trade, direct trade or Rainforest Alliance-certified is another way private brands are differentiating and reinforcing consumer lifestyle choices regarding sustainability.
This drive for differentiation continues to the in-store and on-shelf experience as well, with private brands offering larger and more varied package sizes (such as 18-, 24- or even 48-count versus the standard 12) and even mix-and-match programs that allow shoppers to build their own variety packs — driving trial and adoption.
The next yet-untapped trend private brands may bring to the single-serve category is third-wave coffee, which focuses on high-quality, premium production and brewing methods. Consumers who are interested in high-quality specialty coffees but aren’t willing to commit the time and energy required for these brewing methods will respond to more premium single-serve coffee offerings, such as single origin, small-batch roasted and high bean quality.
This breadth of sustained innovation in this single category alone is proof that private brand is primed and ready to transform a range of products throughout the store from category runners-up to category front-runners.