Enjoy a 10% discount when you use the code EQLYSEP23 at checkout from the 20th to the 30th of September 2023

B2B Explore insights impacting the B2B environment, including production and supply network, and the trends that are evolving the global consumption of ingredients and packaging materials across a changing consumer goods marketplace.

Recyclable Coffee Pods: Sustainability Villains to Sustainability Champions?

Matthew Barry Profile Picture
Matthew Barry Bio

The enduring popularity of coffee pods is in many ways a puzzle. Reliably, consumers express concerns over packaging waste, particularly as single-use plastics are favoured by most leading pod systems, and yet each year, there is consistently strong growth in coffee pod sales. Powered by a new wave of remote workers no longer obtaining their coffee fix from an office kitchen, retail value sales of fresh ground coffee pods reached USD22.6 billion globally in 2021, 22% higher than 2019. Future growth projections remain strong, with the category expected to reach USD27.3 billion in constant value terms by 2026. A handful of European countries, notably Germany and the Netherlands, have seen sustainability concerns combine with market maturity to tip volume forecasts into the negative, but across much of the world, the category continues to grow at a rapid rate.

The complexities of sustainable at-home brewing

The sustainability credentials of pods are more complicated than is popularly appreciated. This is because of a tendency to focus exclusively on packaging at the expense of other aspects, especially the resources used to grow coffee and energy used in brewing. If these are considered, pods actually stack up quite well. They use coffee itself more efficiently than any other method and use less energy during the brewing process than drip or espresso machines. Some research suggests that, even with associated packaging issues, pods are the most sustainable format of packaged coffee.

The growth of coffee pods, therefore, is not inherently negative for the environment, although it certainly does not mean that the packaging issue is not extremely serious. All major pod systems have major room for improvement in this regard and will need to make greater efforts in the coming years.


Source: Passport

The challenges of making pod packaging more sustainable

The essence of coffee pods is that they are convenient. Any packaging solution therefore needs to grasp that the defining feature of the pod consumer is that they are significantly more convenience-oriented than the average coffee drinker.

Alternative single-serve options have been appearing for years and continue to do so at a regular pace. Coffee in tea-like bags, single-use pour-over, and premium instant have all found market niches, but none has made a serious dent in the sales of coffee pods. The failure of any of these options to enter the mainstream is evidence that sustainable single-serve will have to mean sustainable pods. This leaves three possible solutions to the pod packaging issue.

The first is refillable pods, which are perceived as the most effective at reducing total waste. The business model of pods, however, is built on the idea of consumers regularly buying branded products. None of the owners of the pod systems is therefore likely to ever support refillables. It will remain, however, an option for consumers, and will place pressure on pod system owners. Failure to credibly solve the packaging issue will push more consumers into reusables as sustainability concerns grow.

There is also the possibility of pods that degrade. A pod that could be thrown into a regular waste bin would be well received, but the perfect combination of biodegradability, cost, and quality has yet to emerge. Many pods currently marketed as sustainable are actually compostable, which requires that they be at least placed in a home composting pile but more often are sent to a specialised facility. Given how many consumers do not have at-home composting, let alone easy access to an industrial composting facility, these kinds of pods are not a real solution. Theoretically, a fully degradable pod suitable for a normal waste stream would be ideal, but none of the major pod companies have shown much interest in following this route.

Recyclability is the (problematic) future

This leaves recyclability, the route that the world’s largest pod systems have all decided to take. This is in part because consumers like recyclable solutions. The Euromonitor International Consumer Lifestyles Survey found that 54% of global consumers considered recyclability to be a sustainable packaging attribute in 2021, the highest number of any option surveyed (just 39% of consumers say the same about compostability, the most credible alternative at the moment).

The world’s largest coffee pod system, Nespresso, uses aluminium for its capsules. Aluminium is commonly recycled, but Nespresso uses a silicon lining that means the capsules cannot be handled by municipal recycling. Instead, Nespresso itself handles the recycling. Consumers need only to drop off their used pods at a collection point or mail them to the company. Even so, Nespresso has stated publicly that only about 30% of its pods are recycled.

The situation is even worse for other major systems, all of which are plastic-based. North America’s dominant system, the Keurig, recently became fully recyclable but uses polypropene, which many municipalities cannot handle. Even those that can process this option often struggle with the pods because of their small size. Additionally, Keurig requires consumers to empty out the used grounds and peel off the foil top before recycling, a more time-consuming process than Nespresso requires. The recycling rate of Keurig pods is unknown, but it is undoubtedly well below that of Nespresso.

Other major global pod systems such as Dolce Gusto and Tassimo also use plastic and face similar challenges.

The experience of Keurig and Nespresso therefore suggests that the only way to make the recycling of coffee pods viable is to create options that can easily be thrown into a normal recycling pile. A preview of what this may eventually look like can be seen in a pilot programme being rolled out in the UK called Podback, which allows pods from all major producers (plastic or aluminium) to be placed in a special bag that can be put out with other recycling.

A world that will lose a significant portion of its coffee growing areas to climate change is one that will require efficient, waste-minimising solutions to brew coffee. This means that pods will need to gain a larger portion of the overall coffee mix in the years ahead.

To persuade sustainably-minded consumers, a lasting solution for packaging will need to be found. All current options have deep flaws. Reusables have no corporate support, compostables are impractical, and biodegradable options are unavailable at an acceptable cost and quality level. Recyclables, troubled as they are, offer the most likely solution. The major pod systems will have to move towards pods that can be recycled not in specialised facilities but in normal municipal ones. When these issues are finally addressed, pods could use their efficiency to become a key part of coffee’s larger move towards sustainability.

Interested in more insights? Subscribe to our content

Latest Insights

What Inflation Pressures Mean for Fashion Supply Chains Today

Marguerite Le Rolland 25 September 2023

Plant-Based Foods & Proteins Summit Asia 2023

Euromonitor International 19 September 2023

Shop Our Reports

Ingredient-Led Beauty

Amid high-profile lawsuits and recalls, ingredient-led beauty is propelled by consumers’ quest to control their health. Awareness is rising among all beauty…

View Report

Global Inflation Tracker: Q3 2023

This report examines inflation levels and drivers globally and in key countries. Global inflation is moderating, although divergence among the key economies…

View Report

New Economic Reality: Rising Energy Pressures

The global energy crisis has had far-reaching implications for consumers, businesses and entire economies, highlighting the importance of the global energy…

View Report
Passport Our premier global market research database with detailed data and analysis on industries, companies, economies and consumers. Track existing and future opportunities to support critical decision-making across all functions within your organisation Learn More