Are Stumptown-Branded K-Cups the Future of Coffee?

Following a string of unprecedented coffee mergers and acquisitions during 2015, looking ahead this year and into the future, the world of coffee is primed for more consumers to have access to higher quality cups, as better brews go mainstream. But the struggle between specialty coffee artisans and corporate brands will endure.

In another chapter of coffee’s epic tug of war between quantity and quality that has continued for over a decade now, last year began with something of an J. Robert Oppenheimer moment when K-cup inventor John Sylvan expressed regret in The Atlantic for the time-efficient Keurig coffee machine many environmentally-conscious consumers have come to recognize as a scourge. Since 2010, around 53 million Keurig machines have been sold, cranking out push-button, personal caffeine doses with landfill-destined plastic cups promising all the efficiency and quality of gas station coffee from the comfort of one's home. In spite of Keurig’s undeniable waste problem, last year came to close with JAB Holdings purchasing the company for $13.9 billion, a price some consider far above its market value, particularly since Keurig sales fell 23 percent last year. A recent Mintel study shows that, while the large majority of home coffee consumers recognize the unresolved sustainability issue in K-cups, the single-cup brew market is projected to grow 81 percent over the next five years, surpassing conventional roasted coffee sales in 2018.

...the single-cup brew market is projected to grow 81 percent over the next five years, surpassing conventional roasted coffee sales in 2018.

Market forecasts have yet to grasp the concept of specialty coffee, an industry comprised primarily of independent businesses that favor time consuming, manual brews. However, anyone that’s visited a farmers’ market or walked through revitalized districts of urban centers recognizes that a decent chunk of the American populace is engaging with quality coffee on a deeper level.

Last fall brought the release of the coffee documentary Barista, which sports enough commercial appeal to suggest that the specialty coffee industry might be reaching a wider audience. Finally challenging stereotypes of the pretentious, aloof coffee genius, the documentary’s subjects come across as passionate, thoughtful individuals willing to take a pay cut in pursuit of delicious brew. Charles Babinski—the 2015 United States Barista champion, co-owner of Go Get Em Tiger in Los Angeles, and one the film’s main subjects—told Eater that the thawing of hostilities between the passive coffee drinker and the formerly cultish specialty coffee pro is a recent development:

There was a period not too long ago, even if you were into coffee a little bit, you were a coffee nerd. People were like, "Whoah, Steve’s got a siphon. What do you think you are Steve, a chemist?" Then you have all of these home brewers popping up, and all of the sudden, it feels like this quality coffee movement. It’s not a couple of weirdos; the chances of at least one person around you being into coffee is higher. Now it’s no longer a movement; it’s something that is ubiquitous in the larger cities, and even in the smaller cities there are good coffee shops.

Babinski’s fellow Barista subject, Charlie Habegger—who is now a green buyer for San Francisco-based Blue Bottle following the Oakland stalwart’s acquisition of Los Angeles' Handsome Coffee Roasters—says 2015 was in many ways characterized by hospitality advances, creating more open, collaborative space with customers, thus reversing the stigma for which specialty coffee was notorious in its early years.

"Eight years ago we thought education was going to save coffee, that calling certain milk temperatures blasphemous to customers’ faces was good for them, as if we didn’t need customers’ support to carve out a market," Habegger says, adding that the contrarian coffee pro has, by and large, faded out. Instead, consumers increasingly encounter open minded coffee enthusiasts bringing quality coffee into new areas like the suburbs, or restaurant menus, both historically stubborn frontiers.

... the contrarian coffee pro has, by and large, faded out.

Blue Bottle’s retail prowess has helped the company avoid a drop in coffee sales after discontinuing its wholesale program last June, which management felt was not meeting their standards. The move to focus on their cafes in the Bay Area, New York, Los Angeles, and Tokyo set out to create outposts that "sparkle for their neighborhoods," as Habegger puts it.

In Los Angeles, Babinski believes his city last year saw an increasing amount of customers from all walks of life picking up the habit, a trend he says would not have happened if people were not finding value in the coffee quality itself.

Perhaps influenced by the burgeoning cafe scene, consumers displayed leaps of faith in buying more high-tech home coffee brewing equipment and pricer beans in 2015, which suggests a desire to improve the home coffee experience for the year ahead. Some went so far as to pre-purchase equipment that does not yet exist. Several new brewers are either fresh on the market or will debut this year as a result of Kickstarter campaigns, one such being the Duo, a sleek update to the French press promising a full-bodied, rich cup of coffee with none of the grit.

Last year, after raising $200,000 from three thousand backers, Duo inventor Jake Miller formed Fellow Products (right now he's producing the Duo and the Stagg Kettle) and dove into the manufacturing game. Fellow’s brand manager Hanna McPhee says that between their beta version and second generation Duo, they've moved "thousands of units" thus far, selling out of the first wave of pour-over kettles in under two months. Still not quite at the 10 million mark boasted by Keurig in 2014, the upstart (currently just three people, with another on the way) has big plans to introduce a full line of coffee gadgets.

An improvement on the French press seemed the best point of entry. "Our demographic is huge, we have folks from age 20 to 64 interested in trying specialty coffee in a new way" says McPhee, adding that craft coffee brewed at home shows great potential despite its inability to match the convenience of single-serve, push-button coffee. "I think there will always be a ritual when dealing with specialty coffee, but that’s okay. Your coffee’s going to taste infinitely better. Grinding the beans, smelling the fragrance of it wakes you up. Not only does it taste better because the craft itself is better, but you’re also taking ownership of it," she continues.

McPhee also believes coffee subscription services that gained steam in 2015, such as MistoBox, Crema.co, and Craft Coffee, will coax more consumers into specialty territory as they can be enjoyed on home turf, where convenience is less imperative than an office setting. Since Blue Bottle closed their wholesale program, Habegger says they’ve been selling more coffee through their subscription service, what he describes as "a huge opportunity for storytelling" since home brewers take more time with their coffee, paying extra attention to flavor profile and origin. "It’s hugely gratifying to me as a green buyer because we’re passing on producers’ [backgrounds] and sourcing vignettes to people in their kitchens."

Tech company Prima Coffee counts this slow coffee drinker as its core demographic. Branching out from a restaurant supply company in Louisville, Kentucky, Prima has, for the past six years, specialized in the growing home coffee equipment market, offering education to consumers looking to make the leap. Rep Steve Rhinehart says the organization saw significant growth last year, adding more espresso machines and burr grinders to its lineup. Per Rhinehart, "2015 [was] the year that specialty coffee in the consumer world became more mainstream ... This stigma of needing to have a waxed mustache to make good coffee is fading away."

While automatic drip brewers can’t yet replicate the results of the carefully made pour-overs first introduced by the hipster set, Rhinehart says larger companies are taking cues from increasingly popular manual brewers. "Now you’re seeing more household names like KitchenAid and Oxo paying attention to [brewing technique]. They’re creating products that aim to hit the same points—brewing in hotter temperatures, having a better distribution of water over the coffee grounds."

High-end Bonavita brewers proved to be one of the sleeper hits for Prima last year, along with home roasting gear. And further, as one might have noticed in 2015, cold brewers caught on in a big way. "I didn’t know ten people who had the Hario Mizudashi two years ago, but all of the sudden we’re seeing a lot of interest in [the cold brew system]. We’ve had to order a bunch more than predicted," confesses Rhinehart.

... pour-overs will continue to provide a gateway for people looking to brew better coffee at home.

While the most visible brands jumped on the cold brew train, coffee purists are worried that its popularity could stunt the growth of their movement.

Brian Jones, founder of the tastemaking blog, Dear Coffee, I Love You, says cold brew’s main problem is that it strips a coffee of its complexity, resulting in a "muted, flat-tasting beverage." He adds that "a lot of places will even market cold brew as a less acidic way to drink coffee, but acidity is a pretty important character attribute for a lot of specialty coffees."

On the brightside, Jones believes pour-overs will continue to provide a gateway for people looking to brew better coffee at home. If this manual practice continues to catch on in 2016, Japanese iced pour-overs, the method first championed in the states by Peter Giuliano, Counter Culture alum and Specialty Coffee Association of America’s current Director of Symposium, could offer an alternative to the broadside approach of cold brew’s overnight steep. With an iced pour-over, the cold brew maintains more of its crucial acidity without suffering from dilution (as opposed to a brewed concentrate over ice), resulting in the proper ratio of water to coffee.

Further encouraged by market forecasts for ready-to-drink cold brews, last year the category jumped 115 percent from the year before. Newly acquired JAB brands all appear to have big plans for cold brew as more of the public develops an insatiable thirst for the warm weather beverage. Stumptown stated that their recent acquisition by Peet’s Coffee has facilitated a more robust cold brew program. Caribou Coffee plans to bring their recently-introduced nitrogen cold brew to more stores this winter.

Assorted cold brew coffees. [Photo by Alex Ulreich.]

Babinski believes that grassroots coffee trends like this will continue to influence the wider coffee drinking culture, resulting in a more democratic landscape populated by independent businesses who have the freedom to push the envelope: "The past two years you’ve seen all of these really small operations—in some cases only one person is doing all the roasting, packing and shipping. You can do this because you have the internet, books, consultants that will give actual real help on how to roast."

But how larger companies will interact with this quality sector is up for speculation. Skeptics, like Jones of Dear Coffee, I Love You, predict the logos of Stumptown gracing the covers of K-cups now that the quality pioneer and single cup manufacturer are under the same JAB umbrella, a possibly tense relationship highlighting the struggle between Keurig’s turn-and-burn model versus that of intentional quality espoused by specialty coffee’s heroes of yesteryear.

"I think many people still need the efficiency that K-cups offer," Jones says. "Way too many people are way too lazy, even to make something as simple as a French press." While it’s not a given that specialty coffee alone will fill the void should more of the public grow to share the niche group’s dissatisfaction with the K-cup, the dynamic of big brands mimicking (or co-opting) the small-batch artisan could result in a wider audience warming up to quality coffee—or at least, the concept of it.

Whether or not the actual coffee which both sides depend on for their livelihood will be as readily accessible in the decades to come is another story. As the industry (and mankind) continues to grapple with problems of social, financial, and environmental sustainability, the impending supply deficits in the coffee fields, a crisis precipitated by climate change and extremely low prices paid to farmers, could be in the news with greater frequency in the year ahead. Here’s to hoping the K-cup doesn’t turn out to be the proverbial "destroyer of worlds" some fear it could be.