John Sylvan attended Colby College in Maine in the late 1970s, and his roommate Peter Dragone would go on to be his business partner by the early 1990s. Sylvan, a tinkerer, quit his tech job at Analog Devices in Massachusetts in the early 1990s, and wanted to solve the issues of brewed coffee becoming bitter, dense, and stale with time by creating a single-serving pod of coffee grounds, and a machine that would brew the coffee pod.
Sylvan went through extensive trial and error trying to create a pod and a brewing machine. The machine he developed brewed a K-Cup beverage by piercing the aluminum foil seal with a spray nozzle, while piercing the bottom of the plastic pod with a discharge nozzle. Grounds contained inside the K-Cup pod are in a paper filter. Hot water is forced under pressure through the K-Cup pod, passing through the grounds and through the filter.
By 1992, Sylvan went to Dragone to help create a business plan. Dragone was director of finance for Chiquita, and Sylvan offered him a partnership. Together they founded Keurig in 1992. The name came from Sylvan having looked up the word “excellence” in Dutch.
The prototype brewing machines were a work in progress and unreliable. For funding, Sylvan and Dragone approached Green Mountain Coffee Roasters for an investment. After pitching to numerous investors, Keurig and Green Mountain obtained $50,000 from Food Fund in 1994, and $1 million from Cambridge-based fund MDT Advisers. In 1995, Larry Kernan, a principal at MDT Advisers, became Chairman of Keurig.
Sylvan did not work well with the new investors, and he was forced out in 1997, selling his stake in Keurig for $50,000. Dragone left several months later, but retained his stake in Keurig.
In 1997, Green Mountain Coffee Roasters became the first roaster to offer coffee in the Keurig “K-Cup” pod for the Keurig Single-Cup Brewing System, and Keurig delivered its first brewing system, the B2000, in 1998, designed for offices. The brewing machines were large, and hooked up to an office’s water supply; Keurig sold the machines to local coffee distributors, who installed them in offices for little or no money and relied on the K-Cups for profits.
Keurig had created a new category with cup-at-a-time pod-style brewing, a breakthrough product, and a breakthrough business model.
By 2002, Keurig was selling 10,000 commercial brewers a year. Consumer demand for a home-use brewer increased, but it took time to design and manufacture of a model small enough for a kitchen counter that was also affordable. When Keurig had a home-use prototype ready in 2004, so did Salton, Sara Lee, and Procter & Gamble. But Keurig capitalized on the increased awareness of the concept, and sent representatives into stores to do live demonstrations of its home brewer and give out free samples. Keurig and K-Cups became the dominant brand of home brewers and single-serve pods.
By 2006, Green Mountain had completed acquisition of Keurig, and Keurig’s licensees, creating an effective “razor/razorblade” model that allowed for explosive growth and high profits. By 2008, K-Cup pods were available in supermarkets across the U.S., and coffee pod machine sales multiplied more than 6-fold from 2008 to 2014. For fiscal year 2014, Keurig generated $822 million from brewers and accessories, while the pods had done $3.6 billion in sales.
The company introduced the Keurig Vue brewer, paired with new Vue pods, in February 2012, seven months before the key patent on the K-Cup expired in September 2012. The Vue pod is made from recyclable #5 plastic. Though the Vue brewer was discontinued by 2014, Keurig still sells the Vue pods.
Keurig was named Single Serve Coffee Maker Brand of the Year consecutively from 2012 to 2015 by Harris Poll Equitrend. However, beginning with a 2010 article in The New York Times, Keurig has been publicly criticized by environmental advocates for the billions of non-recyclable and non-biodegradable K-Cups purchased and disposed of by consumers every year that end up in landfills. Competing single-cup brands have single-serve pods that are recyclable, reusable, compostable, or biodegradable.
In late 2005, Green Mountain and Keurig launched the My K-Cup reusable and refillable pod, which could be filled with any brand of coffee. Though discontinued in 2014 with the launch of the Keurig 2.0 brewing system, consumer backlash prompted the company to bring back the My K-Cup and make it compatible with the 2.0 brewers.
Keurig Green Mountain confirmed that a priority for the company was ensuring that 100% of K-Cup pods were recyclable by 2020.
Since leaving Keurig, Sylvan founded Zonbak, a solar panel startup company, and Pro Van Kits. Sylvan built his first van in 2019 in the parking lot of Zonbak, and became interested in the complex engineering required to design and build a conversion van. With his son, he cofounded Pro Van Kits to combine CAD and Computer Numerical Control (“CNC”) to dramatically reduce the time and cost of van conversion with the flexibility to meet the owner’s requirements, and to engineer custom components.
Sylvan is an inventor on nine U.S. patents, one of which was once ranked #1 in the world in market value.