A Tortilla-Making Machine

The Lempert Report
June 09, 2016

Pod food might just be the next big thing

Flatev is entering the food pod market with a tortilla-making machine, hoping to do for the multibillion-dollar tortilla industry what Keurig did for coffee, with plans to begin manufacturing and shipping its product by the summer of 2017. 

The company’s machine uses hot metal plates to cook fresh tortillas in one minute from refrigerated dough pods that range in flavor from traditional to bacon bits.   

Companies fueled with venture capital from Silicon Valley, seem to love the “pod” concept.  In creating a recurring revenue stream like with K-cups, or the age old razor blade business. When the product become pervasive the coffee machines, or razor blade handles is usually a fraction of total revenue because customers keep coming back for those high margin pods. 

Keurig sells a $100 machine to customers who then buy a regular supply of one-serving pods. Their brilliance has been to expand the assortment and brands of coffee to hundreds of varieties making it easy for consumers who are loyal to a particular type and brand to use their machine, and pods for convenience. The company earned more than 80% of its revenue ($4.5 billion) from coffee sales in 2015.