The success of single-brew home coffee systems like Nespresso and Keurig has revolutionized at-home caffeine consumption, but sustainability remains a significant concern. Companies like Keurig Dr. Pepper and Nestle-owned Nespresso are striving to reduce the waste generated by their popular pod systems. Efforts are underway to introduce plant- and paper-based pods that can be composted, expanding their availability in more markets.

These sustainability initiatives are critical as Americans are avid coffee drinkers. According to the National Coffee Association’s latest National Coffee Data Trends report, more American adults drink coffee daily than any other beverage, including tap or bottled water. Single-cup brewers are the second most popular at-home coffee preparation method, behind traditional drip coffee makers. Since 2017, there has been a 45% increase in Americans owning single-cup brewers, reflecting the growing trend toward convenience.

Keurig coffee sales in the U.S. surpassed $4 billion last year, while Wall Street analysts estimate Nespresso sales at roughly $1.5 billion. Market research firm Mordor Intelligence projects that the U.S. coffee pods and capsules market will grow from $8.4 billion last year to $10.1 billion by 2028.

Environmentally friendly, biodegradable, and compostable coffee pods are increasingly in demand. NEXE, a Canadian packaging solutions supplier, launched a line of compostable coffee pods in the U.S. and Canada in 2021, marketing them as Keurig-compatible. The company also plans to produce Nespresso-compatible pods soon.

However, challenges persist. The U.S. recycling system is fragmented, with only 73% of households having access to recycling and only 21% of household recyclables being captured, according to The Recycling Partnership’s 2024 State of Recycling Report. Supply chain issues and lengthy product development cycles also pose obstacles. Additionally, gaining customer acceptance for new sustainable products can be challenging for companies seeking to produce more eco-friendly coffee pods.

“I think these companies are trying to find something that if they don’t end up getting recycled — which a lot of them don’t, unfortunately — what happens then,” said Dillon Baxter, founder and chief executive of PlantSwitch, a material-science company that makes plant-based alternatives for coffee pod manufacturers. “It takes time and it’s something that is typically an additional cost, and so it can impact their bottom line. It’s not as easy as some people might think to transition.”

Keurig Dr. Pepper’s New Plastic-Free Pod

Keurig Dr. Pepper announced in March that it would introduce K-Rounds pods, which are plastic-free. These new pods will be wrapped in a plant-based coating, eliminating the need for recycling, which has been a challenge for the company in its push for greater sustainability.

“Where recycling happens, it’s a great solution,” said Monique Oxender, the company’s chief corporate affairs officer who oversees sustainability initiatives. “But since it’s not uniform, it doesn’t completely solve the problem.”

The transition to plastic-free pods has been five years in the making. Beta testing is set to begin in the fall, but there is no definitive timeline for widespread availability. “We feel confident that this is the future of the Keurig system. We just want to make sure, before we take it to scale, we have it right,” Oxender said.

Consumers will need to purchase a new brewer to use the plastic-free pods, but they will still be able to brew existing K-Cup pods for a broader variety of flavors. The company expects the new pods to be certified compostable and is working through the certification process.

For Keurig, the journey toward sustainability is ongoing. At the end of 2020, the K-Cup pods transitioned from No. 7 plastic to recyclable polypropylene, known as No. 5 plastic, to improve recyclability options. However, this transition was not a complete solution. Although No. 5 plastic is widely accepted in curbside recycling systems across North America, many communities do not yet accept certain polypropylene containers, including coffee pods, for recycling. The company is collaborating with individual communities and recyclers to expand local recycling options, but this effort takes time.

Keurig is also focused on decreasing its overall plastic footprint and incorporating recycled plastic in select brewers. Later this year, Keurig will offer a mail-back recycling program for K-Cup pods via Keurig.com for consumers who cannot currently recycle these pods in their community.

Nespresso’s Paper-Based Compostable Pod in Europe

Nespresso offers two different lines of machines that use aluminum capsules, which are readily recyclable. “It’s really unlike any other material today to protect the flavor and taste of coffee,” said Jessica Padula, Nespresso’s U.S. head of sustainability.

Padula notes that the company has used aluminum for over three decades because it preserves coffee taste well and not all plastics are recyclable. Nespresso consumers can recycle their capsules through pre-paid shipping labels at some 88,000 UPS drop-off locations across the U.S.

Making it easy for consumers to return the pods is the right strategy, says Tom Szaky, chief executive of TerraCycle, a private U.S.-based recycling business that includes coffee capsule recycling. “When companies invest money to make the effort easy and accessible to consumers through mail-in programs, local store drop-off, or curbside pickup, it raises the likelihood that consumers will recycle,” he said.

Curbside pickup is the most efficient method, according to Szaky. In New York City, Nespresso has partnered with the city’s recycling contractor to create special equipment so consumers can recycle the capsules directly from their at-home bin. Nespresso extended the curbside program to Jersey City, New Jersey, starting this month, Padula said.

“If it’s not curbside recyclable or cannot be designed to be curbside recyclable, it’s about making a meaningful investment so that it’s something that’s convenient and accessible for consumers,” said Szaky, whose company works with both Keurig and Nespresso.

Currently, only 43% of households participate in recycling; of those that have access, 59% use their recycling service; and of those that do, only 57% of recyclable material is put in recycling containers, according to The Recycling Partnership. An effective system would have a 90% participation rate.

Nespresso numbers are even lower: Approximately 36% of U.S.-based Nespresso drinkers recycle their capsules, according to a company spokesperson.

These recycling issues explain why Nespresso is also exploring other sustainable options for its pods. The company piloted compostable paper capsules in France and Switzerland, where its coffee is produced. They are home compostable and have been very well received, Padula said.

However, challenges arise when replicating this momentum in the U.S. Shipping coffee from Switzerland to the U.S. takes considerable time, and aluminum preserves it better for longer. The company aims to offer other sustainable options to customers without compromising taste. “We are actively looking to bring a paper option to the U.S., but it has to preserve the coffee quality and taste,” Padula said.