Why Keurig Kold Was a Flop
Keurig Hot made making coffee convenient and intuitive. And when the market inched to a point of saturation, Keurig decided to stay ahead of the curve and launched equally intuitive Keurig Kold. Right before its year anniversary, Keurig discontinued their cold drink maker.
And their experience offers a cautionary tale: Even with large market potential, a product may fail. But it doesn’t have to.
Expertise Sets the Stage
Competition with the carafe made single serve coffee an extremely desirable experience. Although, Keurig addressed the pain points associated with batch brewing, revenues from coffee k-cups were falling and patents were expiring. As a product company, Keurig was looking to what was next and they were in a hurry.
Leveraging deep expertise and resident knowledge, Keurig sought to apply the same business model and k-cup technology to the cold beverage market. The potential was there (as evidenced in graph below). If they could capture a fraction of the Keurig Hot success, it would be a win. And with strong brand, prominent partners and product knowledge, the expectations were very high.
The results, unfortunately, were underwhelming.
Where Expectations Went Wrong
To understand what went wrong with Keurig Kold, we must first understand what it takes to make a chilled carbonated drink. At Altitude, we went as far as taking one apart as you can see in the pictures below. The primary functionalities – cooling, carbonation and sanitary dispensing were all new frontiers for Keurig, yet upon closer inspection it appears many of their solutions were well thought-out.
Keurig’s cooling solution worked, and there is something to be said for that. Yet cooling tradeoffs (see below) made early on in the product development process may have not aligned with the experience consumers desired.
Carbonation proved a particular challenge, as the basic process is to dissolve CO2 into water, which requires two things: low temperature and high pressure. Neither of these are easy to do in a consumer appliance.
Keurig avoided the distribution hassles of the CO2 tank, made famous by SodaStream, and instead captured enough CO2 in a k-cup to carbonate a drink. The decision, although beneficial to Keurig, burdened the cost and size of the k-cup, and potentially limited the end experience.
When viewed in entirety, the story the Keurig Kold tells is not inviting:
– The price point, $400 for the appliance and $1.50 per 8 oz drink, is too high.
– Its large size takes up valuable counter real estate.
– It requires a two hour cool down time.
– All of this is done to create a beverage that takes two minutes to drink.
Technology tradeoffs are often decided at the beginning of the product development process, yet have the largest impact on the experience. And each variable requires consumer feedback, something Keurig may have lacked. Taking an unplanned route on any of those items can and did doom the project. They should have carefully considered the following (and maybe they did, but not enough from the consumer standpoint):
- Why do people drink chilled beverages?
- What is the consumer’s ideal chilled beverage experience?
- How does modern technology fit into this ideal experience?
And when Keurig Kold is compared to a can of soda, it’s difficult to see the potential benefits. Reviewers seem to agree (from Keurig website reviews): .
“This thing is an absolute monster,”
“I really wanted to like it, but I’m not sure if I’m likely to buy more pods and continue to use the machine.”
If Keurig wants to compete with the convenience of a soda can they must focus on understanding what role cold beverages play in people’s lives and dial in the experience and technology accordingly. Because in the end, going back to consumers, asking why and incorporating that feedback, is a path most product companies avoid. Let’s hope they have learned this with the recall they announced yesterday for the $370 Keurig Kold Machines that have been purchased.
Will anything be more convenient than a can of soda? Please let me know what you think in the comments below. And check out our connected system solution for making home cocktails easy, delicious and accessible to everyone.