Coffee drinkers take note, the price of your morning brew is about to go up. Keurig Green Mountain, makers of the popular single-serve Keurig machines, announced that it will raise the cost of its K-cup packets by up to 9 percent starting November 3. The price hike comes roughly five months after the company revealed its Keurig 2.0 machines, which pack built-in DRM to limit competition.
Keurig attributes the price hike to recent droughts and disappointing coffee harvests in South America, which have raised the price of Arabica beans by as much as 50%. However, the price increase is especially hurtful to consumers because Keurig's new machines will only work with Keurig-approved K-cups. Older machines worked with third-party K-cups, which allowed for a more competitive K-cup market and cheaper prices. With these new DRM-style machines, consumers have no choice but to buy Keurig-approved K-cups, since the new machines will not recognize unlicensed pods.
Despite the crackdown, Keurig hopes it can retain customers by arguing that its new locked-down systems will ensure a high quality brew with each cup. The new 2.0 machines, which are rumored to start at $189, will also pack new features such as the ability to brew a 4-cup carafe and a preferences button, so users can program brewing preferences into their machines. Whether this will be enough to please its customers has yet to be seen, but one thing is certain, even as Keurig's patents on its pods expire, the company is making sure it keeps tight control of its profits. And that's not surprising, as U.S. sales of pods tripled to $3.1 billion between 2011 and 2013, according to market research firm Mintel Group.
Unfortunately, Keurig isn't the only coffee giant to raise its prices this year. Earlier this summer, Starbucks hiked the price of its coffee by up to 8%. Folgers and Dunkin Donuts were equally affected by rising coffee costs and also passed the burden to consumers with similar price hikes of 9% on their brews.
With price hikes and lockdown policies taking effect, how do you plan on satisfying your coffee urge?
Louis Ramirez is a features writer for Dealnews.com, where this article first appeared: http://dealnews.com/features/Keurig-Will-Raise-K-Cup-Prices-by-9-as-New-DRM-Machines-Limit-Competition/1125466.html