A blog experiment by Brad Mills.


Keurigs and the economics of coffee

Awhile back I was introduced to a fancy single-cup coffee machine. We became pretty good friends for a week or so but we never really kept in touch after that, so we moved on with our lives. After giving it some thought I decided it was probably a friendship of convenience after all.

Well, guess who's back.

The Keurig Elite 40 And there it sits on the counter in the kitchen. I think this may be the exact same one I used at the beach, though I don't know for sure. For the record, it is a Keurig Elite 40, which is one of the low-end models and a slightly used one at that. It retails for around $115, which is a little steep for what is basically a consumer-level coffee machine. The ordinary Mr. Coffee we've had for five or six years, by comparison, was in the $25-35 range.

When I spent the week with the Keurig I quickly determined the cost of the machine plus the cost of the individual pod things (called K-Cups) made it a pretty expensive operation overall, but still less than something like Starbucks. I also boasted I could probably make "fancy" coffee for less than 20 cents a cup, but I never followed through on that thought experiment. With a Keurig on the counter now, I can do a fairly detailed analysis of it versus the old Mr. Coffee and take everything into account.

So here it is. After two solid weeks of research, I can confidently state 1) I can indeed make fancy coffee for less than 20 cents per cup, and 2) despite a pretty steep initial investment, it's possible to drink coffee from a Keurig for less than from a regular drip coffee maker, eventually recover the cost, and save money week after week afterward. This is not at all the result I expected to get, of course, which makes it all the more interesting to me.

Warning: A good bit of math follows, but it's mostly unit scaling, percentages, and the four basic operations. Please hang with me... I promise not to go too far into the weeds.

Consumption habits

A few preliminaries. I have one cup of coffee each weekday morning, and usually two on the weekends, sometimes three. The Mrs. has two on weekdays and two or three on weekends. Between us, we go through about 25 cups each week. The kids don't drink coffee, thankfully. Leftover grounds and filters get dumped into the kitchen composter and eventually make their way to the compost bin in the backyard. This is a fairly new routine just started within the last few months — but one whose ecological simplicity and flow appeals to me, and thus one I hope to retain.

I'll add for the record that we have an intern at work right now who makes some of the best coffee I've ever had in my life, but that is excluded from the calculations I've done here.

Week one: The Keurig

Operation is pretty straightforward. There's a reservoir, a spout, electronics and pumping and heating stuff inside (which we won't worry about here), and a place to put the K-Cup pod thing. You pop in the K-Cup and push a button, and in less than a minute you have a cup of coffee. Not bad and very Jetsons-esque. The price for instant gratification is high, though. The K-Cups are typically around $12 for sixteen, though you can find them at lower prices if you look around. But staying at that price point, a week of K-Cups is around $18.73.

The Keurig's electrical usage ramped up to 1400 watts while brewing, but the rest of the time it sat around two or three watts. For the week it used 1.37 kWh of electricity, and at AEP's current rates of ten cents per kWh, that's 13.7 cents. It also used 1.875 gallons of water to brew the coffee, which worked out to 1.44 cents. Yes, I measured the water; I want this to be a complete cost analysis.

Overall cost for the week: $18.89. Overall cost per cup: 75.54 cents.

Week two: Mr. Coffee

The Mr. Coffee Coffee preparation isn't a huge ordeal after you've practiced it a few times. Filter in basket, five "CBC standard scoops" into the filter, fill the pot with water up to the ten mark (which does not mean standard eight ounce measuring cups — thus is a little subject to wiggle), empty the water into the reservoir, hit the start button. After five to ten minutes, coffee is ready. Please note the "proper" amount to use is subject to debate — my focus here is real-world daily usage as it's been here for years and years and years.

One CBC standard scoop, it turns out, is slightly less than five teaspoons — and in a 34.5 ounce can of coffee there are 270 scoops. I have no idea what CBC means or why coffee comes in 34.5 ounce cans instead of something a little more normal, but whatever. One can of Kroger coffee runs about $6.99 (and is comparable enough to name-brand stuff to be acceptable), so each scoop is 2.59 cents, each pot is 12.94 cents, and a week of that comes to 90.61 cents. For the record, that's less than five percent of the cost of K-Cups.

The old Mr. Coffee runs at 915 watts while brewing, and over the next two hours, the coffee pot gets periodically heated up to keep it warm before everything shuts off completely. In an idle state, the coffee maker uses about a watt — this is a bare-bones machine, no fancy timers or clocks or anything. Over the week this worked out to 2.22 kWh or 22 cents. 2.375 gallons of water went in, and of that, 1.906 gallons were consumed while the other 0.469 gallons got poured out. In total, the water cost 2.18 cents.

Overall cost for the week: $1.23. Overall cost per cup: 4.27 cents. That's right: a cup of regular coffee from a drip coffee maker, all things considered, costs less than a nickel. I think that's a very cool determination and I'm glad to have that piece of knowledge. To make "fancy" coffee in a regular coffee maker for less than 20 cents per cup, all I need to do is find coffee for less than $41.88 per can, or $19.42 per pound.

Environmental impact

The interior of a K-Cup Each K-Cup is a disposable plastic cylindrical shell which holds the — ahem — "correct" amount of coffee and a tiny paper filter. The whole thing is sealed on top with a foil label. When the K-Cup is inserted into the machine, the top and bottom are punctured so the hot water can run through and brew the coffee. I presume the coffee and paper filter can be composted just like they could from a normal coffee machine. The plastic shell, however, has no recycling symbol on it at all, so although I can indeed feed the garden, I'm simultaneously feeding the consumer waste stream with a Keurig in normal operation. The output from the Mr. Coffee is 100% compostable. Even the leftover coffee can be used to water plants, and it actually serves as decent fertilizer.

6 days of K-Cups

Here is a picture of about six days' worth of K-Cups. Multiply this by 61 to get an idea of how much waste is produced annually. Hey, that one in the front says decaffeinated — who put that thing in there?

Best of both worlds

Perhaps in response to customers' environmental concerns, Keurig (along with a number of third-party manufacturers) developed a reusable K-Cup. It comes with a metal mesh filter you can wash in the dishwasher and the whole contraption works much like the filter basket in a normal coffee maker — just put in a scoop of coffee and brew away. This is pretty cool because the plastic K-Cups are eliminated, the coffee grounds can be composted, and you can get a decent cup of coffee in less than a minute.

So far so good. Did I run this through a cost analysis too? You betcha. Making 25 cups of "hybrid" coffee, or a week's worth, costs only 79.86 cents, which works out to 3.19 cents per cup. This is a cost savings of 25.1% versus using a regular Mr. Coffee drip coffee maker, meaning (drum roll, please) it is indeed possible to use a Keurig coffee maker and make coffee for less. From this, it's even possible to recover the cost of the Keurig itself as well as the reusable filter. A low-end Keurig costs $115 and the reusable K-Cup costs around $11.50 for a total investment of $126.50. This is $96.50 more than a regular old drip coffee maker, so that's the amount we need to recover.

Since we're saving 42.8 cents per week (1.2265 - 0.7986), we can divide the investment cost of $96.50 by the weekly savings of $0.428 to see how many weeks it will take to make up for the cost of the Keurig supplies in hybrid mode. That magic number is 225.5 weeks, or a little over 4 years and 4 months. So, it's entirely feasible for a Keurig coffee maker to pay for itself over time — and in an environmentally-friendly manner — if you do things properly. The $96.50 question is whether or not a Keurig, in this era of disposable products, will last more than four years and four months.

I'll let you know in 2017.

The wrap-up

With a Keurig, you can spend a lot more for a cup of coffee versus an ordinary drip coffee maker — over fifteen times as much. But with one small additional purchase and a little effort and attention, you can get the cost below normal coffee, slowly recoup the cost of the machine, and still keep most of the convenience. The trick is that initial expense and that small bit of effort. This meshes pretty well with my exercise in making bread which also costs less and eventually recovers the cost of the machine — said cost being fully recovered next spring.

And even though this Keurig didn't cost me anything, it was worth running through the numbers for the sake of pure knowledge... which I'm happy to share here.

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