Keurig Green Mountain, the local startup made good and then assimilated by Coca-Cola, has formally unveiled its new Keurig Kold system online. To me, it still looks like an Edsel in the making. What’s worse, the troubled company is clearly betting the farm on this overpriced gizmo.
The cost alone is a deal-breaker. Add to that the machine’s clunky performance, and you have a product fated for the dustbin of history.
Cost? The list price of a KK is $369 — by far the most expensive of any Keurig device. But that’s just the entry fee. Your $369 buys you the opportunity to make little tiny eight-ounce servings of cold beverages at a per-cup cost of more than a dollar.
And each serving takes more than a minute to produce.
Which begs the question: why in hell would anyone buy this piece of junk?
Here to explain is Tara Murphy, senior vice president of Keurig Kold. (Who, if she’s smart, is already updating her resume.) She told the New York Times that “consumer research six years ago among buyers of Keurig systems indicated strong interest in a cold machine.”
Excuse me. Six years ago? How timely.
You know what’s happened between now and then? SodaStream, a much simpler and cheaper system, entered the market, enjoyed a boomlet, and faded badly. (Times: “SodaStream… experienced a 45 percent plunge in sales of its flavor bottles on top of a 37 percent drop in device sales in its second quarter.”) In other words, many consumers view SodaStream as a one-hit wonder, not a permanent addition to their kitchens.
And the much costlier, more intricate KK is supposed to buck this trend exactly how?
Well, Murphy asserts that KK will be positioned as a luxury gadget, not an appliance:
She said Keurig was aiming Kold at bars and den areas and keeping it away from kitchen counters already occupied by Keurig coffee makers. “It’s for people who entertain a lot and want to have the latest technology to show off,” Ms. Murphy said.
Yyyyyyeah. Well, first, the Sharper Image crowd is a distressingly small (and flighty) target audience for a mass-market product. And second, will “people who entertain a lot” want a product that takes more than one full minute to produce a single eight-ounce serving? Gonna be a long line at the bar.
This looks like a product that originated at a much more optimistic moment in the company’s history, and that turned out to be much more of an engineering challenge than originally believed. (CEO Brian Kelley boasted that KK uses “parts and processes found in the aerospace and weapons businesses,” which is a selling point that hasn’t worked since the salad days of Tang and Space Food Sticks.) But as the company spent more and more money on R&D, and as it faced patent expirations on its hot-beverage technology, nobody had the guts or foresight to pull the plug. Full steam ahead, and never mind the icebergs.
The Times helpfully lists KGM’s other difficulties: falling sales of its hot-beverage machines, a failed rollout of its 2.0 system last fall, a massive product recall right around Christmastime, “higher numbers of returns of the new model coffee system,” and falling profit margins on those environment-befouling K-cups. KGM’s stock price has dropped by more than 50 percent in the last year, and the company has already laid off five percent of its workforce.
And Keurig Kold is supposed to make all of that better? Like the song says:
You’re as cold as ice
You’re willing to sacrifice our love
You never take advice
Someday you’ll pay the price, I know
The sad thing is, a whole lot of Vermonters are going to pay that price.