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Large K Cup market tempting Pittsburgh area coffee companies

They’re quick, convenient and they deliver caffeine in a drink most people would consider “coffee;” and the growing market share of single-serving coffee makers have even some java purists in Western Pennsylvania weighing whether to grab for a piece of the “K-Cup” market.

The single-serving cups often going by the brand name, K-Cups, remain popular — the National Coffee Association estimated that 33 percent of American households have a Keurig or similar single-serve brewer as of 2017, up from 29 percent last year — but the coffee pods can be expensive or labor-intensive to package; can leave behind plastic, foil and cardboard waste; and aren’t as flavorful as freshly-ground beans.

That hasn’t stopped shops like East Liberty-based Zeke’s, Wilkinsburg’s Biddle’s Escape and Friendship-based chain Crazy Mocha from exploring the market; while McKees Rocks-based Fortune’s Coffee already has its own locally-made cups for sale in 80 grocery stores.

The Zeke’s Coffee in Baltimore, where the brand was started by another member of the family that spun off the Pittsburgh and Washington, D.C. locations, makes and sells “Z-Cups” in stores and online. But their Pittsburgh affiliate says local single-serve cups are still at least a year off, pending more hiring and equipment purchases.

“I’ve been against the K-Cup market for quite a few years because of the waste, but our Baltimore side found biodegradable cups they are using,” said Chad Hammitt, general manager of East Liberty-based Zeke’s. “It’s definitely on our radar… We’re interested, but we have a little less staff than Baltimore, so right now we don’t have the man-hours.”

The Baltimore branch has simple packaging machinery that requires staff to hand-fill and seal the cups, he said. More automated machines can cost from $75,000 to hundreds of thousands of dollars, depending on their size.

“It’s a growing market. We recently got into both Whole Foods and Giant Eagle (selling bagged coffee), and they’ve both expressed interest in the product,” Hammitt said.

Biddle’s Escape is still searching for the right materials and machinery, but is also definitely interested in breaking into single-serve cups, said owner Joe Davis.

“Until we can do it biodegradable, I really don’t want to get behind it… We want it to be environmentally sound,” Davis said. “In a worst-case scenario, I really don’t want non-biodegradable, but if there’s enough demand… you have to start somewhere.”

He’s working with a Pittsburgh-area company trying to create their own machine using environmentally-friendly cups, and would like to start a new facility in Wilkinsburg to do the roasting and packaging alongside training baristas and roasters. Some of the creative staff at the shop have already helped design the packaging, Davis said.

Crazy Mocha is also exploring single-serve cups and would want a new space to make them in, said owner Ken Zeff. But rather than focusing on individual consumers buying a box or two at a time, he was aiming to sell whole cases to offices and businesses for their break rooms.

“Offices go through 50 cases at a time, but home users would buy one or two cases a week,” Zeff said. “To get the economies of scale, you need to move a lot of units… It’s not a complimentary item to a cafe.”

Since packaging, storing and selling single cups in significant quantities would require a lot of room, Zeff said he’s holding off until the company gets a larger facility — possibly in the same building as the coffee shop and commercial kitchen he plans for Braddock .

Cranberry-based coffee wholesaler Kiva Han, which currently provides coffee to the Crazy Mocha chain and hundreds of other shops in the U.S., has heard requests from its customers to offer single-serving cups but remains against it, with owner Ed Wethli citing both the environmental cost and the loss of quality in the coffee.

“I get questions every day, ‘Do you have a K-Cup option?’ and we don’t… It seems like the market keeps pushing us to do it,” Wethli said. “We tell people the most optimal way to get the full benefits of their coffee is to grind it fresh and brew it immediately. K-Cups can sit for months. You’re getting stale coffee. You lose the oils in the fresh-ground beans.”

Fred Smallhoover, whose Fortunes Coffee in McKees Rocks is the only local roaster to fully embrace the single-serving market, said making and selling the coffee locally still gets a fresher cup to consumers than larger, national coffee sellers.

“We noticed not a lot of local brands out there were doing it,” said Smallhoover, who began selling single-serving cups about a year ago. “We can make a new batch every month or so, so our cups are no older than two months when they’re on the shelves. With the larger companies, who knows how long they sit in warehouses?”

Fortunes’s single-serve cups are sold in about 80 grocery stores, mostly Shop &Save, Kuhn’s and Giant Eagle branches. Smallhoover said he skipped hunting for biodegradable packaging in order to get his coffee into the market and build his brand at a competitive price; once they’re established he said he would look more into switching to a more earth-conscious cup.

Patricia Elliott-Rentler, who took over Greensburg’s DV8 Espresso Bar and Gallery with her wife and business partner earlier this year, said she understands the desire for speed and convenience over quality and experience that makes single-serving coffee so attractive, but never considered making or selling them at the coffee shop.

“Creating something like a K-Cup would detract from what we’re trying to do. I didn’t understand people who aren’t in a hurry, but people will happily stand in line and wait,” said Elliott-Rentler, who is also a practicing attorney. “I have a Keurig at home and in the office, but I haven’t used either of them since taking over the shop. My perspective has changed.”

Matthew Santoni is a Tribune-Review staff writer. Reach him at 724 836 6660, or on Twitter @msantoni.


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