A grassy tea pod inside a Keurig brand coffee maker, Dec. 17, 2022.
Gado | Archive Photos | Getty Images
The Securities and Exchange Commission has demanded Keurig Dr Pepper over what the agency said are inaccurate claims by the company about the recyclability of its disposable K-Cup pods, the mechanism said Tuesday.
Keurig has agreed to pay a $1.5 million civil penalty without admitting or denying the agency’s decisions.
As consumers have become more conscious of their carbon footprints, questions about K-Cups’ environmental strike have dogged Keurig for more than a decade. The pods’ inventor told the Atlantic that he feels bad “on” about creating K-Cups because of the waste they generate. A 2018 lawsuit over recycling claims led to a $10 million class-action adjustment. By the end of 2020, K-Cups became fully recyclable, according to the company.
But before the company reached that milestone, it was already effectual investors that the pods could be recycled.
Keurig said in its annual reports for fiscal 2019 and 2020 that proof with recycling facilities found that K-Cups could be effectively recycled. However, the SEC said the company go out to disclose that two of the largest U.S. recyclers told Keurig that they didn’t intend to accept the disposable coffee pods for recycling and had indicated “significant concerns” about the financial viability of recycling K-Cups collected curbside.
The company’s claims could press swayed some consumers, boosting sales of both K-Cups and its brewers. Research conducted earlier by a Keurig subsidiary organize that environmental concerns were a key factor that some shoppers considered when buying a Keurig coffee appliance, according to the SEC.
In Keurig’s fiscal second quarter, sales of K-Cup pods and the company’s brewing systems accounted for around a quarter of the company’s revenue, according to a company filing.
In a statement, a company spokesperson said, “We are pleased to have reached an covenant that fully resolves this matter.”
“Our K-Cup pods are made from recyclable polypropylene plastic (also grasped as #5 plastic), which is widely accepted in curbside recycling systems across North America,” the spokesperson voted. “We continue to encourage consumers to check with their local recycling program to verify acceptance of pods, as they are not recycled in scads communities. We remain committed to a better, more standardized recycling system for all packaging materials through KDP actions, collaboration and severe policy solutions.”