In 2015, Keurig Green Mountain, the company behind the popular single-serve coffee makers, announced its plans to enter the cold beverage market with the launch of Keurig Cold. The new product line was designed to offer consumers a convenient and easy way to make cold beverages, such as soda, iced tea, and juice, at home. However, despite the initial hype and excitement, Keurig Cold failed to gain traction in the market and was eventually discontinued. In this article, we will explore what happened to Keurig Cold and what went wrong.
The Concept and Launch of Keurig Cold
Keurig Cold was first announced in 2013, and it was touted as a revolutionary new product that would change the way people consumed cold beverages at home. The system used a similar pod-based technology to Keurig’s coffee makers, but instead of hot water, it used a proprietary carbonation system to create fizzy drinks. The initial launch was planned for 2014, but it was delayed several times due to technical issues and manufacturing problems.
When Keurig Cold finally launched in 2015, it was met with a lukewarm response from consumers. The system was expensive, with a price tag of around $300, and the pods were not cheap either, costing around $1-2 per serving. Additionally, the selection of flavors and brands was limited, which made it difficult for Keurig to compete with established players in the cold beverage market.
Partnerships and Flavor Options
One of the key strategies behind Keurig Cold was to partner with popular brands to offer a wide range of flavors and options. Keurig partnered with companies like Coca-Cola, Dr Pepper, and Kraft Foods to offer a variety of flavors, including soda, iced tea, and juice. However, despite these partnerships, the selection of flavors and brands was still limited, and many consumers were not impressed.
For example, the initial launch of Keurig Cold included only a handful of flavors, including Coca-Cola, Diet Coke, and Sprite. While these flavors were popular, they were not enough to convince consumers to switch from traditional soda and iced tea to Keurig Cold. Additionally, the pods were not compatible with other Keurig systems, which made it difficult for consumers to use their existing Keurig machines with the new cold beverage system.
Technical Issues and Quality Control
Another major issue with Keurig Cold was technical problems and quality control issues. Many consumers reported issues with the system, including problems with the carbonation system, leaks, and clogs. These issues were not only frustrating for consumers but also damaged the reputation of Keurig and its products.
In addition to technical issues, there were also concerns about the quality of the pods and the ingredients used in the flavors. Some consumers reported that the pods did not taste as good as traditional soda and iced tea, and there were concerns about the use of artificial sweeteners and preservatives in some of the flavors.
The Decline and Discontinuation of Keurig Cold
Despite the initial hype and excitement, Keurig Cold failed to gain traction in the market, and the system was eventually discontinued. The decline of Keurig Cold was due to a combination of factors, including technical issues, limited flavor options, and high prices.
In 2016, Keurig announced that it would be discontinuing Keurig Cold and focusing on its core coffee business. The company also announced that it would be laying off hundreds of employees and closing several manufacturing facilities.
The discontinuation of Keurig Cold was a major blow to the company, and it had a significant impact on its stock price and reputation. However, Keurig has since recovered and has continued to innovate and expand its product line.
Lessons Learned
The failure of Keurig Cold provides several lessons for companies looking to enter new markets and launch new products. One of the key lessons is the importance of conducting thorough market research and testing before launching a new product. Keurig Cold was launched without sufficient testing and market research, which led to technical issues and quality control problems.
Another lesson is the importance of offering a wide range of flavors and options. Keurig Cold was limited in its flavor options, which made it difficult for the company to compete with established players in the cold beverage market.
Finally, the failure of Keurig Cold highlights the importance of pricing and affordability. The system was expensive, and the pods were not cheap either, which made it difficult for consumers to justify the cost.
Conclusion
In conclusion, the rise and fall of Keurig Cold provides a cautionary tale for companies looking to enter new markets and launch new products. Despite the initial hype and excitement, Keurig Cold failed to gain traction in the market due to technical issues, limited flavor options, and high prices. However, the failure of Keurig Cold also provides several lessons for companies looking to innovate and expand their product line. By conducting thorough market research, offering a wide range of flavors and options, and pricing products affordably, companies can avoid the mistakes of Keurig Cold and achieve success in the market.
What was Keurig Cold and how did it work?
Keurig Cold was a line of at-home beverage machines developed by Keurig Green Mountain, designed to dispense cold beverages such as soda, iced tea, and juice. The machines used a unique pod-based system, where users would insert a pod containing the desired flavor and the machine would carbonate and chill the drink.
The Keurig Cold machines were designed to be compact and user-friendly, with a touchscreen interface and Wi-Fi connectivity for easy software updates and maintenance. However, the machines were also relatively expensive, with a price point of around $300-$400, which may have been a barrier for some consumers.
What were the main reasons for the failure of Keurig Cold?
One of the main reasons for the failure of Keurig Cold was the high cost of the machines and the pods. The machines were priced significantly higher than other at-home beverage machines on the market, and the pods were also more expensive than buying traditional soda or juice. This made it difficult for Keurig to compete with other brands and attract price-conscious consumers.
Another reason for the failure of Keurig Cold was the limited availability of flavors and brands. Keurig partnered with several major beverage companies, including Coca-Cola and Dr Pepper, but the selection of flavors and brands was still limited compared to what was available in stores. This limited the appeal of the machines and made it difficult for Keurig to attract a loyal customer base.
How did Keurig’s partnership with Coca-Cola affect the Keurig Cold launch?
Keurig’s partnership with Coca-Cola was a major factor in the development and launch of Keurig Cold. Coca-Cola invested $1.25 billion in Keurig and partnered with the company to develop the Keurig Cold machines and pods. However, the partnership ultimately proved to be a disappointment, as the machines failed to gain traction in the market.
The partnership with Coca-Cola also limited Keurig’s ability to partner with other beverage companies, which may have further limited the appeal of the machines. Additionally, the partnership may have created unrealistic expectations for the success of Keurig Cold, which ultimately contributed to the disappointment and frustration when the machines failed to meet sales expectations.
What role did consumer preferences play in the failure of Keurig Cold?
Consumer preferences played a significant role in the failure of Keurig Cold. Many consumers were hesitant to adopt a new and expensive technology, especially when they could buy traditional soda and juice at a lower cost. Additionally, some consumers were concerned about the environmental impact of the pods and the machines, which may have further limited the appeal of Keurig Cold.
Consumer preferences also shifted towards healthier and more sustainable beverage options, which Keurig Cold was not well-positioned to meet. The machines were primarily designed to dispense sugary soda and juice, which were becoming less popular among health-conscious consumers. This shift in consumer preferences made it difficult for Keurig to adapt and respond to changing market trends.
What were the financial consequences of the Keurig Cold failure?
The failure of Keurig Cold had significant financial consequences for Keurig Green Mountain. The company wrote off $923 million in losses related to the Keurig Cold business, which was a major blow to the company’s bottom line. Additionally, the failure of Keurig Cold led to a decline in the company’s stock price and a loss of investor confidence.
The financial consequences of the Keurig Cold failure also limited Keurig’s ability to invest in new products and technologies. The company was forced to scale back its research and development efforts and focus on cost-cutting measures to restore profitability. This limited Keurig’s ability to innovate and respond to changing market trends, which further contributed to the company’s decline.
What lessons can be learned from the failure of Keurig Cold?
One of the key lessons that can be learned from the failure of Keurig Cold is the importance of understanding consumer preferences and market trends. Keurig failed to recognize the shift towards healthier and more sustainable beverage options, which ultimately contributed to the failure of Keurig Cold.
Another lesson that can be learned from the failure of Keurig Cold is the importance of managing expectations and being realistic about the potential for success. Keurig’s partnership with Coca-Cola created unrealistic expectations for the success of Keurig Cold, which ultimately contributed to the disappointment and frustration when the machines failed to meet sales expectations.
What is the current status of Keurig Green Mountain?
Keurig Green Mountain is now a subsidiary of JAB Holding Company, a private investment firm that acquired the company in 2016. The company has continued to focus on its core business of single-serve coffee machines and has expanded its product offerings to include a range of coffee and other beverages.
Keurig has also continued to innovate and respond to changing market trends, including the shift towards more sustainable and environmentally-friendly products. The company has introduced a range of new products and technologies, including a recyclable coffee pod and a machine that can brew both hot and cold beverages.