Keurig brews consumer discontent

Nov 2015 Update: Brewer sales plummet 26% forcing Keurig to introduce 2.0 My K-Cup adapter. Owners can use any coffee they wish. Comment of Nov 8, 2015.

Feb 2015 Update: Keurig CEO, Brian Kelley, called one of our readers to discuss the 2.0 restriction. Scroll to comment of Feb 10, 2015 near the bottom of this page.

Two years ago, as the K-Cup patent expired, the leader in single-serve coffee brewers introduced Vue, a slightly larger, coffee pod. If you haven’t heard of Vue, your not alone. The newer single-serve coffee packet never caught fire like Keurig’s original K-Cup. Just as with ink jet printers, the new pod and the brewers that accommodate them were Green Mountain’s strategy to reassert control of a market that produces revenue and profit from a consumable rather than the appliance that processes it.

According to Keurig, the Vue system was introduced “in order to increase the choices users have in brewing beverages.” Now that Vue has failed to gain traction, it appears that Keurig is reaching out to owners and softening their loss.

This certainly sounds like a benevolent company; one that care about consumer preferences, and protections—Right? We’ll get to their motives in a minute…

Keurig Brewer 2.0This month, Keurig put pomp and fanfare behind the introduction of Keurig 2.0. (I think that ‘3.0’ would be a more accurate nomenclature, but who can blame them for trying to downplay the marketplace failure of Vue). And so, this week, I became the owner of a new Keurig 2.0 model 400 brewer. (The flagship model 500—or 560 if you purchase at a warehouse club—has a slightly larger water tank, a larger display screen, and the odd addition of a color changing night light).

Did you catch the omission above? I bet you missed it! I said “I became the owner” rather than “the proud owner”. You might think that unwrapping a new, 3-figure appliance with color display, operating system and lots of shiny new parts would leave me enthralled for at least a week, right?

Not really…

You see, the new Keurig brewer accepts both K-Cup and Vue coffee pods. But it also has has built a camera. The camera spies on the owner of their new 2.0 brewers. (Seriously—It really does!). It’s not trying to film the marital vows that you renewed on the kitchen floor last night. Keurig 2.0 leaves that to the NSA and Google. Rather, the camera is constantly vigilant against any attempt to use unlicensed coffee.

The camera studies the lid of each coffee pod inserted in the brewer and it looks for Taggant, a chemically-coded ink on the outer ring of the lid. It won’t accept the My K-Cup gizmo that Keurig continues to sell for use with legacy brewers, and it even rejects pre-2014 K-Cups from Green Mountain and its partners. Shocking—because they are fully licensed and are well with in the expiration date marked on the package.

For those who own a boatload of Vue pods, the new brewer comes with a comforting statement: “Call us and we will work out something”. Apparently, Keurig will placate owners with a large stash of coffee pods by exchanging them. Gee! That’s great! Just register your products, identify yourself and wait for a package, because your new machine spies on you and will not let you brew your favorite drinks. That’s just ducky.

Was every executive over 25 absent on the day that CEO, Brian Kelley, dreamed up the spy camera? Green Mountain is walking down the path of the early iTunes era. Buy all from Apple or your music won’t play on your phone, your PC or your iPod (the operative word is ‘your’). At least Apple could argue that it was trying to thwart internet piracy.

If you attempt to put a perfectly good coffee pod into a Keurig 2.0 brewer, a message is displayed across a tiny color TV screen:

“Oops! That coffee isn’t compatible with our incredibly high standards! We want you to enjoy the very best experience possible. Besides, you probably wouldn’t enjoy the flavor of coffee from any vendor that refuses to pay us for the privilege of compatibility.”

Keurig-OopsSeriously! It says something just like that. At least, to anyone who can read between the lines. A satirist couldn’t come up with better material for marketing-blunder-of-the year. And not just a blunder, but one that flips a finger to their customers.”

Who would have thunk it? Keurig put DRM into a coffee maker. For cryin’ out loud, it’s a coffee maker! What’s next? Cars that demand Ford-branded gasoline? How about a TV that only displays Sony-licensed content?

As for my new brewer, I have found work-arounds that defeat the Gestapo agent within. Several YouTube mavens describe tricks for keeping Keurig in its place. But make no mistake: It is a pain! I don’t relish the idea of taping a forged software license across a camera and changing it whenever a family member wants to brew a different beverage. I don’t want to search local stores for a licensed K-Cup that is sufficiently close to the each beverage that I already own?                                                 Continue below photo »

Keurig 2.0 brewers look for data hidden in the outer ring

Keurig 2.0 brewers look for data hidden in the outer ring

Keurig has turned their brand into the butt of a joke faster than you can say ARccOS. They must be guided by lawyers with no concept of market dynamics. In the blink of an eye, they will become an anachronism. In a few years, the Keurig 2.0 will be a unit in market training seminars alongside the ‘New Coke’, Andy Grove’s slow recall of the Pentium that exhibited math errors, and Ken Olsen’s conviction that consumers would never buy ‘personal’ computers for use at home.

But unlike Coke and Intel, Keurig doesn’t have a 10 billion dollar cushion. Even worse, they have fooled their fans once before. They may not be able to recover from screwing them over with malicious intent and an extended middle finger.

Green Mountain Coffee has a limited time to recover from the Keurig 2.0 fiasco. Here, then, is our humble WildDuck marketing advice:

  • Change the heartless restriction into an on-screen sales pitch. Be a good guy!
  • Accept all the existing K-Cups that your consumers already own. I have dozens.
  • Offer an adapter that allows owners of your new brewers the same privilege of occasionally scooping in the grounds of their favorite store-bought coffee.

And for G-d’s sake, stop spying on your customers! With a downward-facing camera mounted 10 inches above my kitchen counter, I wonder if your next software update will activate a microphone. Get off my back. Please Keurig; respect your customers!


Afterword 2.0

A guest lecturer at Cornell University asked his students to suggest a shareholder letter from Green Mountain Coffee. I haven’t been a college student in years. But if I were in that class, this would be my letter…

Dear Shareholder,

These are exciting times for your company. As you know, we are introducing a series of Keurig branded coffee brewers that are not quite compatible with both of our previous single-serve coffee pods, the ubiquitous K-Cup and Vue.

Keurig Brian Kelley-a

Brian Kelley; genius behind cameras in coffee pots. But, hey! it’s for your own good. A safer, more enjoyable beverage experience.

As a former Coca-Cola executive, I know a thing or two about tinkering with a successful brand in an effort to teach consumers what is in their best interest. That’s why we pushed New Coke onto the market back then, and it’s no different with the Keurig 2.0 product launch.

Of course, it is critical that we at Green Mountain Coffee convince consumers that our use of digital rights management is a benevolent and beneficial act—one that protects them from unsafe coffee, electrical failure and night terror. We must avoid any perception of ulterior motive or hidden agenda. Fortunately, consumers have a very poor memory. With clever marketing, they will buy our products with an assurance that they cannot accidentally harm themselves (or their Keurig 2.0 appliance) by brewing inferior coffee.

Of course, we could have used the very same coffee pod detection technology to simply display a message that the K-cup a user has inserted is not licensed, and may not taste as wonderful as coffee that comes from a company that pays us for the privilege of compatibility. But that wouldn’t be sufficient. We are concerned that our customers may be too busy enjoying coffee from 10,000 competing brands to heed our urgent warning.

Brian Kelley, CEO
Green Mountain Coffee

Ellery is editor at AWildDuck and owner of a new Keurig 2.0 brewer