Keurig and Flavia: Single-Serve Coffee Showdown

Keurig and Flavia are the Coke and Pepsi of cubicle coffee. According to a 2009 report by Automatic Merchandiser, they've dominated offices nearly equally for the last half decade. Flavia had 362,500 systems in place in the U.S. as of last year, while Keurig had 378,420. "Everyone knows Keurig from the home marketplace," says Steve Serino of BostonBean Coffee, which distributes both. "But Flavia is focused on becoming the leader in the office."

No one will confuse either with a well-pulled single-estate ristretto, but they represent an improvement over Pyrex on a hot plate. The case for Keurig—which owner Green Mountain Coffee Roasters (GMCR) says is derived from the Dutch word for excellence—is simple. Its pods, or K-Cups, include nitrogen-flushed real ground coffee from brands such as Newman's Own and Wolfgang Puck. (Keurig has a portfolio with more than 250 flavors.) Flavia, owned by Mars, uses packets of coffee grounds under a hot seal and offers 35 or so mainly generic flavors.

Having previously made small inroads in the home market, Flavia is now focusing entirely on Corporate America, branding its offerings by selling hot chocolate under the Mars brand Dove and teas under the Bright Tea umbrella. Starting this fall its coffee will be sold under the brand Alterra, with which Mars is partnering. (The name Flavia will only describe the machine itself.) Flavia also claims substantive advantages over Keurig's pod squad. For instance, there's no danger of the dreaded "cross-flavor contamination"—coffee residue, say, in your green tea—since the contents of its packets, unlike Keurig's, never touch the machine.

And Flavia claims a leg up in the cappuccino department by offering independent packets of milk, whereas Keurig offers pods containing milk and coffee together. "I'll let consumers decide," says Rich Surmaitis, global vice-president for marketing at Mars, "but it's not an authentic drink!" A more insidious selling point sometimes whispered by distributors is that with Flavia, there's no worry about employees swiping K-Cups for their home machines.

While Keurig and Flavia beat up on each other, some companies are mulling a post-pod future. Elliott Slutzky, CEO of Chicago-based office distributor Coffee Unlimited, says they favor greener, more cost-effective devices that make single servings from beans, like the Starbucks Interactive Cup Brewer. At these companies, Slutzky says, "Flavia and Keurig are overkill."

    Before it's here, it's on the Bloomberg Terminal.