The Key to the Growth of Keurig

Following consecutive years in which Keurig saw significant sales growth of its single-serve brewing systems, the company continues to work at expanding its penetration rate with consumers with a focus on developing new flavors for use with its appliances.

While Keurig continues to expand the flavor assortment of its K-Cup selection, the company in recent weeks has also forged relationships with Dunkin’ Donuts and Starbucks. The two well-known coffee resellers, which together have thousands of locations across the United States, each will soon begin selling K-Cups for Keurig brewers featuring popular flavors from their respective assortments.

The Dunkin’ Donuts deal, for example, is a prime example of how Keurig will seek out new opportunities to expand its brand presence with consumers.

“Bringing on Dunkin’ Donuts as partner gives them the opportunity to exclusively sell K-Cups featuring their coffee that is used with our brewers,” said Dwight Brown, vice president of Marketing with Keurig. “It also serves to increase awareness of our brewing platform with consumers.”

The Starbucks agreement, which was announced in early March and served to drive up shares of Keurig’s parent company Green Mountain Coffee Roasters, is notably different than the Dunkin’ Donuts agreement. K-Cups featuring Starbucks coffee will be sold across a number or retail segments including grocery stores and drug stores along with general merchandise stores, home specialty tableware stores and department stores such as Walmart, Bed Bath & Beyond and Macy’s respectively, which already sell Keurig brewers.

In addition, Starbucks next year in its stores across North America will also begin selling its K-Cups along with Keurig brewers.

Beyond the high-profile deals that serve to expand Keurig’s K-Cups selection, the company also continues to look beyond coffee. New flavors of tea, cider and hot cocoa allow the company to reach consumers that may not be coffee drinkers, but enjoy other types of hot beverages.

“The e-mails of our top executives are on our website and we get e-mails from our customers continually with suggestions about new flavors,” Brown said. “We also closely watch our Facebook page as well for suggestions.”

On the appliance side of its business, Brown noted that the company has no immediately plans to significantly expand its assortment. He said the over the past couple of years, Keurig has tweaked its brewers adding its quiet-brew technology in an effort to improve the product for consumers.

Although Keurig and its collection of single-serve home brewers have enjoyed significant placement in the weekly sales flyers of retailers across the country, company officials told KitchenwareToday.com that its units are in only about six percent of American homes.

“We have had some great success at retail have seen some great momentum with Keurig, but we see the 94% of homes sitting out there as a great opportunity,” Brown said. “In addition, when we conduct unaided consumer surveys, our brand is mentioned by only about 30% of consumers.”

As part of its effort to continue raising its profile with consumers, the company is expanding its advertising efforts, and earlier this year rolled out new packaging, an updated logo and revamped its website.

“The biggest drivers of our business has been word of mouth among consumers who are the strong endorsers of our products,” Brown explained. “But we know there are more opportunities out there to make more consumers aware of Keurig.”

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