Green tea bags are seen inside a Keurig brand coffee machine on December 17, 2022 in Lafayette, California.
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The U.S. Securities and Exchange Commission said Tuesday it has accused Keurig Dr Pepper of making inaccurate statements about the recyclability of its disposable K-Cup pods.
Keurig has agreed to pay a $1.5 million civil penalty without admitting or denying the agency's findings.
As consumers become increasingly aware of their carbon footprint, the environmental impact of K-Cups has dogged Keurig for more than a decade. inventor of pods Tell The Atlantic He “sometimes” feels bad about making K-cups because of the waste they create. In 2018, a lawsuit over recycling claims resulted in a $10 million class action settlement. According to the company, K-Cups will be fully recyclable by the end of 2020.
But before the company reached that milestone, it told investors the pods could be recycled.
Keurig said in its annual reports for fiscal 2019 and 2020 that tests of recycling facilities found K-Cups can be effectively recycled. However, the SEC said the company failed to disclose that two of the largest recyclers in the United States told Keurig they did not plan to accept single-use coffee pods for recycling and expressed “serious concerns” about the financial viability of recycling K-Cups. Side collection.
The company's announcement could sway some consumers, boosting sales of K-Cups and its brewer. Earlier research conducted by a Keurig subsidiary found that environmental concerns are a key factor some shoppers consider when purchasing Keurig coffee makers, according to the SEC.
In Keurig's fiscal second quarter, sales of K-Cup coffee pods and the company's brewing systems accounted for nearly a quarter of the company's revenue, according to the company's filings.
“We are pleased to have reached an agreement that comprehensively resolves this matter,” a company spokesperson said in a statement.
“Our K-Cup pods are made from recyclable polypropylene plastic (also known as #5 plastic), which is widely accepted in curbside recycling systems in North America,” the spokesperson said. “We continue to encourage consumers to check their local recycling program to verify acceptance of pods, as many communities do not recycle pods. We remain committed to building better, more standardized recycling for all packaging materials through KDP action, collaboration and intelligence Recycling system.