Keurig Dr Pepper K-Cups. The image “Keurig drawer 7-30-17” by THE Holy Hand Grenade! is licensed under CC BY-ND 2.0. The image has been cropped from its original version.
The United States Securities and Exchange Commission (SEC) today charged Keurig Dr. Pepper with making inaccurate statements regarding the recyclability of its single-use plastic K-Cups.
To settle the charges, the Massachussets- and Texas-based coffee roasting, packing and brewing equipment giant agreed to pay a $1.5 million civil penalty, without admitting or denying the SEC’s findings.
In 2022, Keurig Canada reached a $2.3 million settlement with Canada’s Competition Bureau regarding misleading recyclability claims in the Canadian market.
The SEC investigation looked into Keurig Dr Pepper’s annual reports for the fiscal years 2019 and 2020, where the company claimed that its private testing with recycling facilities “validate[d] that [K-Cup pods] can be effectively recycled,” according to the SEC.
However, the SEC claims that Keurig Dr Pepper failed to disclose that two of the largest recycling companies in the U.S. at the time conveyed “significant concerns” to the company regarding the commercial feasibility of curbside recycling of K-cups.
The recycling companies indicated to Keurig Dr Pepper that they did not intend to accept the pods for recycling, according to an SEC announcement of the charges.
“In fiscal year 2019, sales of K-Cup pods comprised a significant percentage of net sales of Keurig’s coffee systems business segment, and research earlier conducted by a Keurig subsidiary indicated that environmental concerns were a significant factor that certain consumers considered, among others, when deciding whether to purchase a Keurig brewing system,” the SEC wrote.
In its 2019 annual filing to the SEC, included in Keurig Dr Pepper’s annual report, the company estimated that approximately 30 million U.S. households had some sort of K-Cup-compatible brewer by Dec. 31, 2019. The company reported total sales of $11.1 billion that year, along with net profit of $1.7 billion. The company reported net revenue of $14.8 billion in 2023.
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