Bad news travels faster than good news, and sometimes it prevents the good news from traveling at all.
Remember the Keurig 2.0 DRM brouhaha from 2014 and early 2015? This February article will remind you.
Late last year, Keurig announced a new machine, the 2.0, calling it the "future of brewing" and touting its ability to make both small cups and large carafes. But another, less-publicized feature has been getting most of the attention: the brewer’s advanced scanning system that locks out any coffee pods not bearing a special mark. It’s essentially a digital rights management system, but for coffee, and it’s proving to be the brewer’s downfall.
On an earnings call Wednesday the company announced that brewer sales fell 12 percent last quarter, the first full quarter for which the 2.0 was on sale. "Quite simply our 2.0 launch got off to a slower start than we planned," said CEO Brian Kelley.
The CEO was speaking euphemistically. A more honest statement would have been "Our customers hate our guts."
And frankly, my brain shut off any mention of Keurig after that, so I didn't even realize what Keurig did a few months later:
The one retaliation that seemed to effect change most efficiently, though, was financial. Keurig machine and accessory sales plummeted 23 percent in the first quarter, year over year, thanks in large part to unease over Keurig 2.0.
To help reverse course, Keurig CEO Brian Kelley this week announced the return of My K-Cup. It’s welcome news for those who dislike needlessly tossing hundreds of small plastic containers into the trash every year, but love freedom of choice and competitive business practices.
“Quite honestly, we were wrong,” explained Kelley on a call with analysts to discuss earnings this week. “We underestimated the passion that consumer had for this… We shouldn’t have taken it away.”
For those who are not familiar with all things Keurig, the My K-Cup allows you to use your own coffee with Keurig. However, Keurig didn't take away the DRM, and a number of people (such as myself) didn't even hear of Keurig's minor about-face. The damage had already been done.
And this was confirmed this week:
Keurig Green Mountain Inc. will be acquired by a JAB Holding Co.-led investor group for about $13.9 billion in cash.
This should please stockholders, since the premium on the purchase price should help make up for the money that the stock lost in the last year. But what does this mean, since JAB apparently plans to keep the existing management in place?
It probably means that JAB doesn't plan to keep the existing management - or structure - in place.
JAB owns a controlling stake of Jacobs Douwe Egberts, Peet’s Coffee & Tea, Caribou Coffee, Einstein Noah Restaurant Group, Espresso House and Baresso Coffee....JAB’s goal is to be the Budweiser of coffee, Pablo Zuanic, an analyst at Susquehanna International, said on Monday. The conglomerate may follow with other deals, such as a takeover of Dunkin’ Brands Group Inc., he said.
Perhaps Kelley will exit within a few months, and JAB will go for a rebranding. Your donut shop, your coffee shop, and your in-home system will be all under a single name. (Unless Starbucks and Tim Hortons merge and copy the idea first.)
So what will the new brand be? Not JAB - that name wouldn't play well here. Unfortunately, "Beatrice" is NOT available.
I guess tech isn't an organic joke (the Twitter analytics of @empoprises and what this means for Ontario Emperor's "Salad") - I thought I'd peek into the analytics for my @empoprises Twitter account, and I spent a bit of time analyzing the audience insights. Insights are available...
4 hours ago