Nearly 30 years after Keurig introduced the world to single-serve coffee pods, the company, now part of Keurig Dr Pepper, is going pod-free.
Well, actually, it is rolling out a line of single-serve coffee rounds made entirely of compressed grounds and encased in a seaweed-based coating to hold it together during shipping. The company sees this format, which resembles a mini hockey puck, as the future of its coffee business. K-Cup lovers need not be alarmed: they will stick around for now.
The new brand, which it calls Alta Rounds, was inspired by customer interest in barista-style coffee options for home brewing but with less waste. Keurig has caught a lot of criticism over the years over that last issue.
Since the K-Cup single serve brewing pod was introduced in 1998, Keurig has produced billions and billions of them -- by some estimates at least 10 billion K-Cups are produced annually, though the company doesn't release that number.
Though these small plastic cups are made of recyclable material, many residential recycling sorting centers aren't equipped to handle them. Keurig actually paid $1.5 million in a civil penalty to the Securities and Exchange Commission in 2024 after accusations it made inaccurate statements about the K-Cup's recyclability.
Still, Keurig executives say their coffee and brewing machines are used in 47 million homes, and this latest iteration of the single-serve concept was driven by the need to outwit the competition.
"We've grown into a disrupter in the coffee category," Phil Drapeau, the senior vice president of future coffee systems for Keurig, said at a recent event in New York where Keurig employees demonstrated the Alta Rounds and the new machine Keurig built to brew them at home. "We needed to break free from the constraints of the K-Cup system."
Keurig Dr Pepper is months away from the formal separation of its businesses into a beverage company and a coffee business. No doubt the Alta Rounds are part of what it hopes will be the growth story for the new stand-alone Global Coffee Co., which has a new CEO, Russ Torres, joining from Kimberly-Clark.
Keurig has estimated the coffee company can generate about $16 billion in annual revenue. The split, planned for early 2027, comes after it bought JDE Peet in a bid to create a global coffee leader.
Market data company Numerator says Keurig Dr Pepper leads its competitors in branded coffee pod manufacturers, reaching 21.3% of U.S. households, ahead of Nestlé (16.5%) and J.M. Smucker (14.4%). Keurig's share of coffee pod spending increased from 19.5% to 19.8% in the latest year -- though is still below 2024 levels.
But more broadly, coffee pod household penetration is dropping, suggesting people are buying coffee in other forms. Keurig's own U.S. coffee organic sales growth has been slowing, notes Barclays analyst Lauren Lieberman, who has an Overweight rating on the stock.
Lieberman says the merger with Peet showcased the merits of the more diversified combination compared with legacy Keurig going it alone.
As for Alta Rounds, Keurig is currently taking orders for a $500 bundle that includes the brewing machine, four boxes of the coffee rounds (which come in six varieties and have eight rounds a box), and glassware to go with it.
The pressed coffee rounds can withstand the extra pressure the new machine uses while brewing. K-Cups would burst under the same pressure. When Keurig began developing the product six years ago, it drew inspiration from the grounds that a barista tamps down in an espresso maker before turning on the machine. The Alta Round feels damp and spongy after brewing but holds its shape.
Product developers and engineers tried various shapes over the years and ultimately settled on a disk. Then they experimented with various coatings and settled on an algae-based formula made from seaweed harvested off the coast of France. It doesn't have a taste and can be composted, along with the grounds themselves.
Ultimately Peet's coffee will become part of the Alta coffee collection as the brand scales up. The new Alta brewing machines can also brew K-Cups from a separate compartment. (Older Keurig brewers cannot accept Alta Rounds, however.)
Drapeau acknowledges that it's going to take time to build the business beyond the novelty it is now. For now Keurig is taking a hybrid approach, with the new pod-less coffee and the familiar K-Cups.
"We're going to get better," he said.
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