A Brief History of Keurig Dr. Pepper, Formerly Keurig Green Mountain, Formerly a Quaint Little Coffee Roasting Business
Today we are going to look at the brief and interesting history of Keurig. If you want to find out what all happened then read this article carefully.
Green Mountain Coffee Roasters of Waitsfield, Vermont
The Green Mountain Coffee Roasters started as a small specialty coffee store in Waitsfield, Vermont. Gourmet coffee was not very famous in the year 1981, but it was something that entrepreneur Bob Stiller intended to change.
He was such a fan that when he tried their product in a neighboring ski resort, he enquired about the origins of the beans. Green Mountain Coffee Roasters would eventually be purchased by him.
The town which Stiller had bought was a tiny Vermont business town. But Stiller went down the streets and he finally branched out into the mail order and he sold coffee to almost everyone. He quickly established Green Mountain’s image as an environmentally conscious promoter of fair-trade coffee. Green Mountain Coffee Roasters has grown to $11 million in yearly sales after ten years and 1,000 wholesale supply contracts.
Keurig Comes Knocking
A venture capital-funded startup named “Keurig” was formed by a few engineering nerds named John Sylvan and Peter Dragone in the year 1993. Their motive was to form a single-cup coffee brewer for the house.
They selected the name because they assumed it meant "excellence" in Dutch, but it means "proper" or "neat" (at least according to Google and Wikipedia). Eh, it’ll do for now.
Sylvan and Dragone and their partner Dick Sweeney met Bob Stiller to discuss their plan of making a single cup coffee brewer, and Stiller acquired a share in the firm. In the year 1997, exactly after four years, the K-Cup was invented. It was compatible with third-party K-Cup compatible coffee machines from well-known brands including Cuisinart and Mr. Coffee. Exactly one year, the first Keurig brewer was born.
The Birth of a Coffee Juggernaut
This collaboration between Green Mountain and Keurig couldn’t have come at a better time. But in the year 1990, a new Starbucks location was popping up about almost every ten minutes in the streets of America. In the year 2006, Stiller eventually increased his stake in Keurig and owned the company.
With complete control of Keurig and its unique K-Cup coffee delivery model, Bob Stiller and Green Mountain Coffee Roasters began shifting from selling low-margin wholesale coffee to ridiculous-margin single-serving coffee. According to several estimates, today’s Keurig K-Cups cost between $40 and $50 per pound. When you compare that to Keurig’s own Green Mountain Coffee, which costs less than $10 per 10-ounce bag, you can see why the business model changed.
Green Mountain’s sales gradually increased as franchise coffee shops and gourmet coffee markets were fostering the development of new coffee culture in the United States and worldwide. Their annual report in the year 2007 was around a net income of less than $13 million. But in the year 2013, their net income had gradually increased over 37 times and rounded off to almost $483 million. In the year 2014, the shareholders of Green Mountain decided to modify the company name to Keurig Green Mountain, presumably to better represent the source of all that cash.
Bob Stiller Gone mad
The founder of the very famous Green Mountain was Bob Stiller and with the success of Green Mountain Bob Stiller owned millions of shares due to the newly named firm. In the year 2011, Forbes declared Bob Stiller as a billionaire.
This was just how much the success of Bob Stiller due to Green Mountain. The net worth of Bob Stiller was around $1 billion on paper. His success was the reason he was able to own the party yacht which isn’t a common thing, I have only seen such a yacht in a party song or on television and he bought such a thing. He also bought a mansion in Florida which isn’t a small thing, not only this, he also bought Tom Brady’s $17 million Manhattan condo.
Stiller was rich for a very long time anyway but yes he wasn’t a billionaire, you need to keep in mind that he was a billionaire only on paper.
Bob Stiller kept spending loads of money that he didn’t have. His time, in this case, couldn’t have been worse, unlike the impeccable timing of his investment in Keurig at the 1990s coffee boom. As the luxury life of a billionaire Stiller pursued aggressively, Wall Street sellers aggressively dropped Keurig Green Mountain’s stock price.
The lenders of Stiller were very confused and they had a panic attack due to this. They also told, actually forced Stiller to sell his Green Mountain shares. The stock prices were reeling at that time and this happened due to the short sellers and because of the selling and releasing of shares in a huge volume the rules of the Keurig Green Mountain were violated. Wall Street knows that the person is in trouble when an executive or owner sells the shares in such volume. This resulted in Stiller getting kicked out of the company he started.
After Stiller getting kicked out the stocks of the company again recovered and it went all-time high. In 2014 the stock price was around $177 per share. Keurig Green Mountain would keep the early Stiller Green Mountain Coffee Roaster green, grassroots attitude, but there is still discussion as to whether or not the values of the company have gone away with him.
K-Cups became famous all over the world
The K-Cups were invited back in 1997, however, the public didn’t think about the environment and didn’t take K-Cups seriously till 2010. The article in the Boston Globe told the effects of K-cups’ environmental impact.
Keurig Mountain used to publish everything about K-Cups in their annual reports till 2009 but as soon as the Boston Globe published the article the annual reports about K-Cups stopped instantly. The graph of "K-Cup Portion Packs Shipped" has been removed by the annual reports of Keurig Green Mountain. Today, they only refer to the percentage of K-Cup net sales growth.
The last annual report about K-cups in 2009 showed that over 1.6 billion portion packs were sold. John Hamblin who was the inventor of K-Cups said that around 9 billion were sold in 2014 by Keurig. Hamblin points to more exact estimates which indicate that the number exceeds 12 circumnavigations. Sylvan, who was driven out of the business and delivered $50,000 for his trouble, even told The Atlantic that he regrets that he invented these K-Cups which impact the environment and earth so negatively.
Keurig Kold the disaster
In 2015, Keurig debuted a new product range called Keurig Kold. It wasn’t, however, one of Keurig’s well-known items. This was a cold beverage machine that served single-serve sodas and seltzers.
Many individuals first purchased this machine, and it generated a lot of buzz in the market. The machine did not live up to the users’ expectations after it was launched. People disliked the product since it was so expensive. This cold drink maker was introduced by Keurig Green Mountain, who claimed it would be the next great thing on the market. However, it was a resounding failure. The consumers frequently expressed their dissatisfaction with this computer, claiming it was too large, too slow, and too difficult to use.
The Keurig Kold made 8-ounce soda drinks that included Coca-Cola, Sprite, Dr. Pepper, and other well-known brands. This machine was then discarded by Keurig since it failed to meet the users’ expectations. If you are one of those users who purchased the machine, I am sorry for you, but wait a minute, if you purchased the machine straight from Keurig, you can still be rescued because the firm is offering refunds for this product.
Keurig abandoned the product line after realizing that no one wanted a large, slow, and expensive beverage maker. People believed that getting a drink from a refrigerator rather than using this equipment was preferable. This equipment was a fiasco, which is why the company chose to reimburse the customers.
For their part, Keurig realizes that one year after the launch of a comprehensive product line, many new and existing Keurig customers will likely embrace the good news: If you order your Keurig Kold before June 10th, 2016, you will receive a FULL REFUND. They announced the Keurig Kold’s demise on June 7, so if you didn’t get the memo and bought a Kold three days later, you’re in big trouble.
Having recycled its coffee pods, Keurig has taken a positive step. They also recently bought a cool $18.7 billion in cash from Dr. Pepper Snapple Group.
So now, the new name Keurig Green Mountain, Dr. Pepper, is available. I hope that does not mean unhealthy consumer surprises, but I guess you don’t know with Keurig.
This was everything that could be known about Keurig