North St. Paul retiree tries to blend his love of coffeehouse brew and single-serve convenience

After retirement a few years ago, George Gorbatenko of North St. Paul found himself so addicted to single-serve coffee pods that he was skipping out on his favorite coffee shops.

At Backroads Coffee, a roasting company near his cabin in Hayward, Wis., he explained to owner Teresa Peters why he was coming around less often.

"I said 'Teresa, I'm sorry, I'm not buying your coffee anymore. I'm hooked on these K-Cups,' " Gorbatenko remembered telling her.

Then he added, "Why don't you package your coffee in these K-Cups?"

Peters said she had thought about it but learned that Keurig, the leading maker of single-serve brewing devices, required coffee roasters to produce and sell volumes that were beyond her reach. Gorbatenko, who had been an engineer and patent litigator in his career, offered to build a machine that could package her coffee in single-serve cups.

She expressed interest, but she told him she wanted the cups to 100 percent biodegradable. "I thought it would be simple wimple," Gorbatenko said.

Peters couldn't afford the machine that Gorbatenko first produced. But he kept working on the idea, spending much of the past six years developing the product while looking for a partner to supply coffee.

Last year, he approached Peter Middlecamp, owner of Black Sheep Coffee in South St. Paul, asking whether he would be interested in purchasing his specialty machine.

Middlecamp was put off by the idea.

"I definitely could not be bothered about K-Cups. I probably said no to George about 20 times," Middlecamp said.

Gorbatenko persisted, and the two began to work through the long process of developing quality coffee for the machine to package through its fully biodegradable pods, establishing Gorby LLC.

Gorbatenko started development on the project with his son-in-law, Charles Roth, along with Chris Zwettler, a local engineer and founder of Zwettler Engineering in Stillwater.

While Charlie provided electrical engineering support, Gorbatenko engaged Zwettler to make the machine appropriate in size and function to owners of small coffee shops.

"He wanted it to be artful as well as functional. That was kind of the genesis of it," Zwettler said.

The machine is assembled locally, from shops in Oakdale and Vadnais Heights, and can fill 1,000 K-Cups an hour for a small coffeehouse.

Gorbatenko planned to produce the cups locally, but manufacturing issues forced him to outsource to China for the pods, which are produced with polylactic acid, a fully biodegradable plastic.

Gorbatenko started working with Middlecamp to develop specialty coffee that would work well with his pods, creating a plethora of challenges for someone with no previous experience selling coffee.

The two started from scratch and endured the initial rough patches in blending and tasting.

"I've never had so much bad coffee. It was just so discouraging," Middlecamp said.

The two tweaked the coffee, eventually learning that they needed to package it one hour after it's roasted to keep oxygen out and maintain its freshness. They both agreed that the final product tasted significantly better than most of their K-Cup competitors.

Middlecamp also wanted to fight the bland, corporate feel of most K-Cup packaging.

"You go into Cub or Hy-Vee or anywhere else, and there are 60 different K-Cup boxes, but it feels like a very corporate thing," he said.

To create a unique feel, Gorbatenko decided that the Black Sheep K-Cups would be packaged in boxes with art designed by local artists.

About one-in-three American households own a single-cup brewing system, but its popularity comes with a side effect. Nine billion K-Cups were discarded in 2015 alone.

Keurig Green Mountain Inc. introduced its recyclable K-Cup pods last year but is trailing other innovators. A spokeswoman reaffirmed that a priority for the company is ensuring that all K-Cup pods are recyclable by 2020.

Hills Brothers, a major coffee company based out of San Francisco, started packaging its coffee in biocompostable pods in April.

Halo, a U.K.-based coffee brand, launched its own completely compostable coffee pods in February. Shakopee-based Cameron's Coffee has its own brand of compostable coffee pods, and has seen sales of its compostable coffee filters skyrocket over the past year.

It's been difficult for Gorbatenko to market his new machine, but with the help of marketing coordinator Emily Theis, he said he can get four or five inquiries a week.

The list price of $24,500 surprises some potential buyers, he said, but he maintains that the quality of the machine helps it sell itself, and it allows roasters to package their coffee for at-home consumption.

After being sold on the idea of the machine and the pods, Middlecamp became the machine's first official user.

"George's machine is great," he said. "It's fast, it's easy, it's not expensive and it makes that dream totally a reality within the reach of your neighborhood coffee shop."

He scheduled meetings with grocers to supply Black Sheep Coffee packaged by Gorbatenko, and slowly received initial interest and confirmation from local grocers.

Middlecamp said that small, local coffee roasters would like to see more local products on grocery store shelves, and that, over the next few months, the Hy-Vee in Oakdale will offer the pods, and Fresh Thyme will also begin offering the product at all Minnesota locations.

Gorbatenko said he doesn't plan on making any money off the venture, he is just trying to get back what he put in.

He said he will model the business after Newman's Own, and donate most of his profits to charity, and hopes to run the charity side of the business after it takes off.

"It's been a lot of ups and downs, but I'm just tenacious. I'm driven to see it to the end," Gorbatenko said. "I think I'm beginning to see light at the end of the tunnel."

Alex Van Abbema is a University of Minnesota student on assignment for the Star Tribune.