Commentary

Keurig Yanks Kold Machines, Vows To Continue 'Reimagining'

In less time than it takes store-bought soda pop to go flat in the pantry, Keurig Green Mountain yesterday said it was discontinuing the first generation of its pricey Kold carbonation device and is offering early adapters a full refund of the purchase price.

The company viewed the Kold system as a ‘pioneering innovation,’ Suzanne DuLong, Keurig's VP of global corporate communications says, but consumers had a different perception, reports the Burlington Free Press’ Dan D'Ambrosio. “They told us they would like it to be smaller and faster, and provide a more compelling value,” she says. 

Indeed, “many consumers balked at the price of the machine, which initially cost $369. The pods also were pricey, costing $1.25 to make an 8-ounce drink,” writes Mike Esterl for the Wall Street Journal. It recently slashed the price of the machines to as little as $199 and the pods to 50 cents, but “to no avail,” he reports.

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Launched at a media event in Manhattan last September after six years of forethought, there we skeptics from the start, we reported at the time.

“The machine was too big, loud, inconvenient and unreliable, according to customer reviews,” which could be “brutal,” writes Hayley Peterson for Business Insider

“‘This thing is an absolute monster,’ one customer wrote on Keurig's Web site. ‘I already struggle with counter space. It's huge and very deep,’” Peterson reports. Another complained, “There is a constant buzzing sound when plugged in (think soda vending machine) that annoys my husband, but I don't really notice it.” 

“The company had high hopes,” for Kold, recalls the Associated Press, “suggesting they could eventually be bigger than its coffee brewers, which it said at the time were in about 17% of U.S. households.” Keurig “acknowledged that what they learned from the Kold rollout would be incorporated into future beverages makers.”

There were, apparently, qualities worth redeeming.

“When The Verge's Jamieson Cox tested the machine at CES this year, he said the flavor of the Keurig-produced Coke was pretty good, but that apparently wasn't enough to make up for the fact that no one really wanted it,” writesThe Verge’s Lizzie Plaugic.

The WSJ’s Esterl points out that Kold’s fizz-out “could give a boost” to SodaStream International, “which last month said North American sales had begun to stabilize after two years of steep declines as it recasts itself as a maker of sparkling water” in the wake of consumers’ distaste for sugary sodas. 

SodaStream’s shares “popped” about 3% yesterday following Keurig’s announcement, CNBC’s Christine Wang reports, but ended the day relatively unchanged. It also recently announced the launch of a home brewing system called the Beer Bar, Fortune’s Benjamin Snyder reports, starting in Germany.

Keurig says 130 workers would lose their jobs, 108 of them at company headquarters in Waterbury, Vt. The company was acquired by Luxembourg-based JAB Holding Co. for $13.9 billion earlier this year. Brian Kelley, the former Coca-Cola Co. executive who was CEO at the rollout, was named vice chairman of the board in March. Bob Gamgort, who had been CEO of Parsippany, N.J.-based Pinnacle Foods, replaced him. JAB Beech, a subsidiary of JAB Holding, most recently bought controlling interest in Krispy Kreme.

“The Kold line was developed with Coca-Cola,” reportsVermont Business Magazine, and offered brands such as Coca-Cola, Dr Pepper and Snapple along with zero-calorie flavored seltzers, ice teas others. “But when Coke sold its large stake in Keurig as part of the sale of Keurig to JAB in March of this year, the Kold line soon followed it out the door,” it observes.

“We are grateful to all of our consumers who have supported our company in the innovation of single-serve beverages,” spokeswoman DuLong writes Bloomberg’s Craig Giammona in an email. “Reimagining how beverages can be created, personalized and enjoyed will continue to guide Keurig's strategy into the future.”

1 comment about "Keurig Yanks Kold Machines, Vows To Continue 'Reimagining'".
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  1. Bill McClain from Bill McClain Brand Builder, June 8, 2016 at 1:40 p.m.

    "early adOpters"... Please proof before publishing.

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