A Denver entrepreneur is betting your company will kick its Keurig coffeemaker to the curb and switch to a machine that fits his single-serve beverage capsule instead.
Michael Szyliowicz and his company, Commerce City-based SolaBev, are making a capsule that won’t fit any of the 20 million brewers that Keurig claims are in the United States.
Szyliowicz’s plan is to market an alternative capsule filled with grinds from smaller roasters and to sell them to restaurants, offices and hotels.
“Essentially, for the same price or less of two K-cups, with SolaBev you get one big cup of coffee or tea or hot cocoa, and it’s recyclable, and it tastes better,” he said. “The biggest challenge we face is getting people to understand that we have this new system and getting them to adopt that new system.”
For a stronger cup of coffee, the SolaBev capsule is twice as large as a K-cup and has a showerhead to spread water across the grinds instead of in one spout.
And for the less-caffeinated drinker, SolaBev fills capsules with leaves from Denver-based Teatulia and cocoa with a powder the company formulated itself. It’s working on lemonade and soda mixes, too.
For offices and restaurants that don’t want to associate their brands with landfills full of K-cups, Szyliowicz said SolaBev spent “tens of thousands of dollars” to make them recyclable. And the capsule’s unique shape means employees and guests can’t purloin the pods to brew at home.
For roasters locked out of alternative brewers that fit only Nespresso or Lavazza coffee pods, Szyliowicz thinks selling SolaBev capsules to businesses will have a bigger profit margin than if they cut the price of their K-cups to compete with brand names on store shelves.
End customers will pay about 94 cents a capsule, Szyliowicz said; K-cups sell for 40 to 60 cents a pod.
“We believe we can capture over 1 percent of unit sales in five years,” he said. “Which is essentially 100 million capsules.”
SolaBev is a spinoff of Szyliowicz’s first food business, a chocolate company called Mont Blanc best known for formulating the powders that make Dunkachinos and other flavored coffees.
Mont Blanc’s business was percolating along just fine until chain coffee shops realized they could take recipes directly to contract manufacturers and cut out MontBlanc as a middleman.
Szyliowicz sold Mont Blanc in January 2014. He then purchased a friend’s business, which included the patents for a coffee capsule and the supply chains for capsule-filling and capsule-brewing machines.
After two years tinkering with the product, SolaBev started selling capsules with beans roasted by Denver-based Luna Coffee. And Luna, in turn, installed the first SolaBev-fitted brewing machine to hit the market at the Boulder office of Stewart Title Co.
The next step is to add more coffee-roasting companies as SolaBev customers, Szyliowicz said, and have them buy the machines to fill SolaBev capsules.
In the next five to 10 years, Szyliowicz is betting SolaBev capsules will be brewing cold and carbonated drinks, including lemonades, sodas and iced teas.
“People want choice,” he said. “What makes the individual single-serve system so great is choice, but now we can offer more choice, because our single-serve system offers cold drinks.”