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Keurig shakes up U.S. coffee import system in unprecedented move

Oct 26 Keurig Green Mountain Inc plans to import coffee beans into the United States through duty-free sites, an unprecedented move in the coffee industry as the single-serve company aims to cut costs amid falling sales of its pods and brewers.

The plan is the latest move by the company to overhaul its coffee-buying strategy after it moved its coffee sourcing operations to Switzerland from Vermont in part to take advantage of an obscure tax exemption that has drawn scrutiny from U.S. lawmakers.

Using the strategy in fiscal year 2014 would have saved the company $1.6 million, according to Reuters calculations.

In applications to create so-called foreign trade zones (FTZs) submitted to U.S. regulators and seen by Reuters, the company said it intends to use four coffee warehouses in ports in Seattle, Virginia and New Jersey for storing and distributing green coffee beans.

The applications were approved by the various ports earlier this year, though they have not yet been activated by Customs and Border Protection, a process that can take several months

The "red tape" and costs associated with establishing FTZs can be substantial, meaning setting them up is generally worth it only if a company can see a return of 100 percent to 200 percent, according to a Congressional Research Service...


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