SCOTT SIMON, HOST:
There was a time when it felt like Keurig coffee pods were going to take over the world - or at least encircle it. But sales are now on the decline, down some $60 million from last year. The company had faced criticism because the individual coffee pods were kind for the environment, but what else is contributed to this decline in sales? Venessa Wong works the coffee pod beat for Buzzfeed. She's been following the fortunes of Keurig for the past few years and joins us from New York. Thanks so much for being with us.
VENESSA WONG: Thank you, Scott.
SIMON: Surely it's not because Americans are drinking less coffee, right?
WONG: No, Americans are drinking so much coffee (laughter). But Keurig is having some problems, as you said. They recently reported their sixth consecutive quarter of negative brewer sales, so it's a problem that they've faced for more than a year at this point.
SIMON: What's the problem?
WONG: I think one of the main problems was they had launched this new brewer called Keurig 2.0. The whole reasoning behind that was that Keurig actually makes most of its money from selling those little coffee pods.
WONG: And when their patent expired for the coffee pod technology, they figured, well, we'll make a new brewer that'll work with only our pods - as other companies start to manufacture their own sort of K-cup products. But consumers didn't like that. So, you know, at this point I think we're just starting to see maybe some K-cup fatigue.
SIMON: So are people using the Keurig, waiting for it to become outdated and then they don't use it again? Go on to something else or what?
WONG: You know, it's really interesting. I think Keurig is often a holiday gift item. So that's, you know, between the months of, say, like October and December is when they sell most of their brewers. And in 2013 holiday season, they sold like a record 5.1 million brewers, but that's been declining every holiday season since. And, you know, we're seeing even interest in Keurig as a holiday gift item perhaps declining.
SIMON: As I don't have to tell you, there is a debate that has opened up as to whether or not the single-pod coffee brewers - whether or not the pods are recyclable, actually use less energy or more energy.
WONG: Totally, I mean I think that's one of the biggest problems with a K-cup is that it does have such a negative environmental impact. And it's something that Keurig has acknowledged. You know, they have said this is one of their greatest obstacles to attracting new customers. And they have introduced some products where you can kind of like spoon your own coffee into like a K-cup-type filter and then kind of make a single-serve coffee like that using your Keurig brewer. But then the question arises, how is this beneficial compared to using the conventional brewer which, you know, costs a lot less than a Keurig.
SIMON: I don't mean to put you on the spot, but what do you drink at home?
WONG: I drink old-fashioned automatic drip coffee. Nothing too fancy. I also have a French press. And I have never found them too cumbersome or time-consuming to use, so (laughter).
SIMON: Venessa Wong from Buzzfeed. Thanks so much for joining us. Have a great cup of coffee.
WONG: Thanks so much, Scott.
(SOUNDBITE OF SONG, "CIGARETTES AND COFFEE")
OTIS REDDING: (Singing) It's early in the morning, about a quarter till three. I'm sitting here talking with my baby over cigarettes and coffee.
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