Coffee Goes DRM

Coffee is a reason to get up in the morning, as its salutary effects are well known and welcome at 0430.  Pop a pod in the Keurig, punch the button, a few seconds later, coffee appears and the fog of the early morning riser starts to lift.

We like the Keurig and have had one for a few years now.  One of us traveled extensively to Costa Rica and always brought back several dozen pounds of the best beans that are lovingly stored in the freezer, then freshly ground, tamped into a personal K-Cup and brewed. 

Other occasions have called for the use of utility coffee, purchased at various retailers and brewed with the same machine:  Sometimes Italian Roast for guests, or something mild and vaguely coffee-like for the frail and sensitive.  We have even stooped to brewing tea in the Keurig, but that has been disappointing unless one is making iced tea, or packing the tea with neat rum, honey and lemon to offset the effects of a cold.

As consumers we like our K-Cup choices; Timmy’s, McCafe, Starbucks, Dunkin Donuts, Maxwell House, Folger’s and Van Houte all make K-Cups of their signature blends, alluring us with the prospect of recreating their tastes at home, where we can have a steaming mug of their stuff, while sitting in the family room wearing a housecoat, having not shaved or bathed for two days after binge-watching “Survivor – Ostomy Island”  

K-Cup pods are ubiquitous in stores, flavoured with everything from Elbonian Salted Caramel Poopachino with Madagascar Cinnamon to a K-Cup pod for “Dishwater Foul” coffee that tastes exactly like the coffee you get in a church basement at 5:30 pm on a Sunday.  If you looked hard enough, you might even find Maple Nut Crunch K-Cups that include a downloadable rant from Dennis Leary with every 10-pack.

Keurig, being the smart company they are, know that selling the coffee maker is but the tiniest drip on the tip of the equation.  Where you slam right in up to the bristles of profit is in selling the coffee pods. The refills, the expendable part of the coffee equation, is where the money lives.

Which is why Keurig is owned a little company called Green Mountain Roasters, that makes the refills in a dizzying array of flavours, many of which taste almost like coffee.  Green Mountain did $3.9 billion in net sales in 2012.

This is only sensible business:  Make a buck off both ends of the deal, with the technology and with the expendables, the refills generally costing more than the device itself.  Look at King Gillette who gave away the safety razor handles, but made big coin on the refill blades, or HP whose ink refills generally cost more than the printer itself.   

The second part of this cozy relationship, Green Mountain and Keurig, is that now that we’re committed to the K-Cup is to change the game in the name of Big Money, delivering ‘game-changing performance’

Keurig 2.0 machines, now available everywhere, have a little sensor in them that reads the K-Cup.  If the appropriate code isn’t on the K-Cup, it means Keurig isn’t getting their cut.  The machine does a Carol and Computer Says No to your steaming cup of Dorkachino.

For those coffee roasters who have not done a deal with Green Mountain, it means they’re effectively shut out of the market, as the Keurig 2.0 machines roll out, replacing the older models.  The third-party pods won’t work with a 2.0 machine.  The lawsuits have commenced.

As consumers, we’re being squeezed.  Buy a new Keurig 2.0 and you get stuck with the price per cup that Green Mountain wants to charge for the K-Cups.  Or, be a nasty little consumer and when your Keurig eventually breathes its last, don’t buy a new one.  Some would even suggest that you go out now and buy a new version 1.0 before they disappear of the shelves.  It’s not as if the 2.0 version also does your dry cleaning and empties the litter box, as well as making coffee:  There is no compelling reason to buy a new one. 

Or, you could rebel completely, tell Keurig to shove it where the sun don’t shine, get an old school coffee maker and the coffee of your choice that you brew and enjoy.


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