Keurig will pay $1.5 million penalty over K-Cups – after claims of false information about its coffee pods

KEURIG has been fined $1.5 million to settle charges that it misled shoppers and the government about its famous K-Cups.

The Security and Exchange Commission leveled the civil penalty against the coffee giant after finding that it falsely claimed its K-Cups were recyclable.

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Between fiscal years 2019 and 2020, Keurig stated that its testing with recycling centers “validate[d] that [K-Cup pods] can be effectively recycled,” according to a statement from the SEC .

However, Keurig did not disclose that two of the largest recycling companies in the US expressed significant concerns regarding the feasibility of actually recycling pods, the SEC said.

At the time, the companies indicated they did not intend to accept K-Cup pods for recycling.

In fiscal year 2019, K-Cup pods made up a significant percentage of net sales for Keurig’s coffee systems. A study found that many consumers bought the pods specifically because of environmental concerns.

“Public companies must ensure that the reports they file with the SEC are complete and accurate,” said John T. Dugan, associate director of the Boston regional office.

“When a company speaks to an issue in its annual report, they are required to provide information necessary for investors to get the full picture on that issue so that investors can make educated investment decisions.”

Keurig did not admit to or deny any of the findings but agreed to a cease-and-desist order and to pay the civil penalty.

K-CUPS IN LANDFILLS

The fine comes after a $10 million settlement regarding the same issue.

Plaintiff Kathleen Smith filed a class action lawsuit against the company, saying the pods “usually still end up in landfills” despite marketing saying otherwise.

A study published in 2020 found that 9 billion pods ended up in landfills in the US in 2014.

Consumers who purchased K-Cup single-serving coffee pods between June 8, 2016, and August 8, 2022, were eligible for a piece of the settlement.

Class members were promised payments between $6 and $36 if they had proof of purchase.

Those without receipts could claim up to $5 per household.

A NEW BREW

In April, Keurig announced it was making a sustainable change to the pods.

All about K-Cups

Keurig's K-Cups are small plastic cups sealed with coffee, tea, or even hot chocolate mix.

They’re made specifically for Keurig machines and serve a single cup of hot beverage in seconds.

Several companies have started producing their own pods that fit into the Keurig machines.

However, Keurig warns on its website that only the brand name ones are “optimally designed” to fit in the machine and keep it running at its best.

The company began testing K Rounds, compacted pucks of coffee that would eliminate the need for plastic pods.

They will be released with the new Keurig Alta, a special machine that brews plastic-free pods.

“Today, we are applying all our expertise to create a revolutionary new system that will redefine how consumers will brew coffee for decades to come,” said CEO Bob Gamgort.

The K Rounds come in four sizes: espresso shot size, regular, double shot size, and a slightly larger pod for cold coffee.

It is not yet clear when the K Rounds will hit shelves.

Americans can get a one-time payment from a $14 million tax filing settlement.

Buzzfeed readers may be entitled to part of a $9 million settlement .