People have been brewing coffee for more than 500 years, but if you go into a kitchen today to look at how it’s made, you’ll probably see a process that bears little resemblance to the methods used just a generation ago. In homes and businesses alike, consumers are shifting to the cup-at-a-time pod-style brewing pioneered by Keurig in the 1990s as an alternative to the messy communal office coffeepot. The company began moving into the home market in 2004, and sales took off. K-Cups now come in more than 200 flavors and sell for about 50 cents apiece. That’s 10 times the cost per cup of coffee brewed by traditional methods, but consumers are willing to pay for the speed and convenience: In 2012 U.S. sales of Keurig coffeemakers and pods exceeded $3.8 billion, and the coffeemakers had a dollar market share of more than 40%.
Why It Pays to Be a Category Creator
Companies that combine new products with new business models see much faster growth.
A version of this article appeared in the March 2013 issue of Harvard Business Review.
New!
HBR Learning
Innovation and Creativity Course
Accelerate your career with Harvard ManageMentor®. HBR Learning’s online leadership training helps you hone your skills with courses like Innovation and Creativity. Earn badges to share on LinkedIn and your resume. Access more than 40 courses trusted by Fortune 500 companies.
Unlock your team's curiosity and willingness to take smart risks.
Learn More & See All Courses
New!
HBR Learning
Innovation and Creativity Course
Accelerate your career with Harvard ManageMentor®. HBR Learning’s online leadership training helps you hone your skills with courses like Innovation and Creativity. Earn badges to share on LinkedIn and your resume. Access more than 40 courses trusted by Fortune 500 companies.
Unlock your team's curiosity and willingness to take smart risks.