Jumping Bean Coffee joins in competition complaint against Keurig

A St. John's-based coffee roasting company is supporting a complaint to the Competition Bureau against coffee giant Keurig Green Mountain Inc.

Jumping Bean Coffee owner Jeff LeDrew says a proposed expansion of his company will be "dead in the water" if alleged anticompetitive practices by Keurig are allowed to continue.

"We're fighting for consumer choice," LeDrew said Thursday in an interview from Ottawa.

LeDrew is in the nation's capital to show support for John Pigott, CEO of Club Coffee.

Pigott is speaking to the Economic Club of Canada about his $600-million lawsuit against Keurig. He argues that the American company is driving up prices and limiting consumer choice.

Compostable pods 

Jumping Bean Coffee plans to launch its own variety of single-serve coffee in the coming days, with varieties such as Screech, Deep Water Dark, East Coast Roast and Lighthouse Roast.

In keeping with the company's environmentally friendly and socially responsible approach, LeDrew said the single-serve cups are biodegradeable, unlike Keurig's plastic cups.

LeDrew said his cups will feature a "soft bottom," similar to a tea bag, and a biodegradable paper lid.

But Keurig's 2.0 brewing system is a worry.

"They've changed the game," he said. "They put the 2.0 technology out there and ... they got it locked down."

Jumping Bean Coffee wants to construct a $2 million facility to expand its whole bean and ground product lines, but LeDrew said that will only happen if the market is truly a free one.

"There's no way for us to be able to invest in that kind of infrastructure and do a compostable pod, and the machines are really expensive," he said.

Market dominance

Keurig controls 90 per cent of the Canadian market for single-serve coffee pods.

This segment of the coffee sector has more than doubled since 2012, with market research consultant Mintel estimating that almost half of Canadian homes now have single-serve brewers.

The patent on Keurig's so-called K Cup expired two years ago, but the company has taken measures to ensure its market dominance, including requiring retailers to sign exclusive deals.

Keurig also introduced the 2.0 brewing system, which will only work with Keurig cups that have a special ink.

Club Coffee is Canada's largest roaster and packager of grocery story coffee, and a major supplier to cafes and coffee shops in North America.

Pigott told the Globe and Mail this week that retailers and distributors have told him they cannot sell his coffee for fear of losing the ability to carry Keurig brewers or coffee.

"There is a chill in the marketplace," Pigott said.

I cannot get my product into national retailers if they're going to lock down the sole supplier and sole manufacturing piece.- Jeff LeDrew

LeDrew has not joined the lawsuit, but is among a group of six companies that has filed a complaint with the Competition Bureau.

He compared Keurig's business practices to changing the locks on someone's house.

"I cannot get my product into national retailers if they're going to lock down the sole supplier and sole manufacturing piece," said LeDrew.