The Keurig coffee maker is a product that launched the Green Mountain Coffee Company from a relatively unknown state to a household name in the coffee market. Unlike single-cup brewers that existed before, the Keurig offers a wide range of coffee and tea varieties and the K-Cups used in the machines are very neat- no loose grounds or spills. Partnering with other coffee brands, Keurig gets a royalty of about 4 cents per K cup sold. This enables the company to generate revenue from licensing agreements and no COGS. Additionally, unlike the Tassimo or Nespresso brewers, K-Cups for Keurig machines are available in a vast array in almost every grocery store and mass retailer.
The company touts a high level of devotion to customer service and my experiences with them confirm their claims for me. After having my own machine stop working, the person I called at Keurig was extremely nice and helpful at guiding me through how to unclog it. The product has clearly been successful for the company. Their revenues have more than tripled in the last few years and they have been able to dominate the single-cup brewing market.