The Keurig-dominated U.S. coffee pod market has seen gains made by Nespresso.

Nespresso is brewing up competition in the U.S. coffee pod market.

The company's U.S. coffee sales were approximately $4.3 billion at the end of last year, and it claims to have installed machines in over 38 million households.

Nespresso, a product of Nestle, has achieved greater success globally in the $100 billion retail coffee market and is now capturing a larger share of the US market.

Euromonitor International's food and beverage insights manager, Matthew Barry, stated that the U.S. market is unique because Nespresso, a minority pod system, has a limited presence globally, while Keurig has almost no presence outside of North America.

Nespresso generated $1.5 billion in U.S. sales last year, but Nestle did not disclose its current household penetration for the product to CNBC.

Nespresso's U.S. business took seven years to become profitable after its introduction by Nestlé in the early 1990s, as stated by Jean-Paul Gaillard, CEO of Nespresso from 1988 to 1998.

Nespresso struggled to gain traction with U.S. consumers until 2014, when it introduced the Vertuo machine. This machine brews full-size coffees in addition to Nespresso's signature espresso options. In 2013, Nespresso's sales were $300 million before the machine was rolled out.

Alfonso Gonzalez Loeschen, Nespresso's CEO for North America, stated that he believes that's where the tremendous shift was seen.

Nespresso experienced significant growth in the U.S. following the popularity of the Keurig system a decade ago. The company saw a nearly $3 billion increase in domestic coffee sales between 2009 and 2013.

Keurig's loss may not necessarily be Nespresso's gain. Euromonitor's Barry stated that the brand may be targeting a different market segment than its competitor and is not focused on overthrowing Keurig.

Keurig also thinks it still has room to grow.

Keurig Dr Pepper's U.S. coffee president, Patrick Minogue, stated that there are over 50 million households in the U.S. coffee market that they still need to cater to, saying, "How do we meet the needs of those users?"

Watch the video to learn more.