Keurig 2.0 brews up DRM to freeze out copycat cups

In an effort to reclaim control over the single-serve coffee market, Keurig parent company Green Mountain Coffee Roasters' new generation of "Keurig 2.0" brewers will include interactive readers programmed to work only with Keurig-licensed K-Cups. The company confirmed the news in a recent earnings call, as reported by Techdirt. The new brewers are due out in stores later this year.

The move comes at a time when Keurig's grip on the booming single-serve coffee market might be slipping. The company's original K-Cup patent expired at the end of 2012, and not surprisingly, bargain-priced competitor cups soon began showing up on store shelves and taking a bite out of Keurig's sales. To make matters worse, the Keurig Vue brewers and their recyclable Vue Packs -- originally intended to replace the K-Cup and extend Keurig's patent-powered control of the market through 2021 -- haven't caught on. After all, the recent surge in unlicensed competitor cups has brought more options and better prices, with companies like Panera forgoing Keurig's licensing fee and passing (at least some) of the savings on to the consumer. Why would anybody switch to something that's more restricted?

That's a question that Green Mountain must answer in 2014, as they'll need to convince consumers that Keurig 2.0 represents a legitimate upgrade and not a power grab designed to freeze competition out of the market, as Grove Square single-serve coffee distributor Treehouse Foods alleged in a recent lawsuit. Green Mountain CEO Brian Kelley claims that the DRM-style protections are designed "to ensure the system delivers on the promise of excellent quality beverages produced simply and consistently every brew every time." The "quality" argument will have to suffice, because with less varieties of coffee for consumers to choose from, Keurig 2.0 won't be able to boast about quantity.

There's some reason for Green Mountain to be optimistic about the next generation's chances, though. With new features like larger serving sizes and the ability to brew an entire pot, Keurig 2.0 will probably have more direct appeal to coffee lovers than Vue did. Green Mountain's recently announced partnership with Coca-Cola and its plans to release a cold brewer this fall could also engender some excitement about what's coming next. There's also the fact that Keurig 2.0 brewers will continue brewing the existing generation of Keurig-licensed K-Cups, making them less of a leap for consumers than the Vue brewers and their proprietary Vue Packs were.

Still, there's quite a lot at stake here for Green Mountain. If Keurig 2.0 fails to catch on, then the company will find itself in an especially vulnerable spot, not only facing increasing levels of competition from big names like Nestle and Starbucks, but also from its own, existing brewers -- many of which will continue making the competition's coffee.