SEC fines Keurig $1.5mn for recyclability claims

The US Securities and Exchange Commission has fined Keurig Dr Pepper $1.5mn for inaccurately claiming that its plastic coffee pods were recyclable in two of its annual financial reports.

In its 2019 and 2020 annual reports, Keurig Dr Pepper claimed that it had verified that K-Cup pods could be recycled through testing.

According to the SEC, Keurig did not disclose to investors that two of the largest recycling companies in the US said that they would not accept K-Cup pod waste, and believed that curbside recycling of the pods was unfeasible.

The small size of coffee pods makes them difficult to sort at many older material recovery facilities (MRFs), which can prevent recycling.

The SEC argued that Keurig therefore violated Section 13 of the Securities Exchange Act of 1934.

Keurig agreed to a cease-and-desist order from the SEC and to pay a civil penalty of $1.5mn, without admitting or denying the SEC's findings.

"Public companies must ensure that the reports they file with the SEC are complete and accurate," Boston Regional Associate Director of the SEC John Dugan said.

In 2022, Keurig Dr Pepper settled a $10mn lawsuit with a California resident after the plaintiff alleged that marketing about the recyclability of its signature K-Cups was false or misleading.

The plaintiff said that the pods were "inevitably" contaminated by foil and food waste, and that municipal recycling facilities could not effectively recycle the pods.

By Zach Kluver