While shares in Keurig Green Mountain fell sharply after it unveiled the $369 price tag for the new Keurig Kold machine in the spring, CEO Brian Kelley said purchase intent scores were high as consumers understood the value proposition.
Commenting on the launch today, he said the KOLD system encouraged “choice and discovery”, enabling consumers to make craft and fountain-style sodas, zero- and low-calorie flavored seltzers and waters, sports hydration drinks, iced teas and - coming soon - cocktail mixers.
"The disruptive countertop-size innovation in KOLD is like nothing consumers have ever experienced - from the rapid chilling that turns room temperature water to a perfectly chilled drink at the push of a button; to the dispensing technology that produces consistently great tasting beverages; to the pod technology which enables fully carbonated beverages. KOLD delivers game changing, on-demand variety.”
‘Choice and discovery’
In a presentation to analysts and investors about the at-home cold carbonation system in May, Kelley said Keurig KOLD tapped into the trend towards customization, would appeal to urban dwellers that don’t like lugging heavy soft drinks home from the store, and promised choice, freshness, portion control (8oz, 100 cals or fewer).
It also frees up space in the fridge and promises “all the fizz without the fuss", he said, as there is no C02 canister [Kold uses ‘carbonator beads’ instead].
The machines – which produce cold beverages at 39°F in 60-seconds – are launching with six new brands exclusive to the Keurig system [Red Barn, Flynn’s, Waterful, Flyte, Tierney’s, Seraphine] plus products from Coca-Cola and Dr Pepper Snapple Group.
Asked about sales forecasts, Kelley expected a slow start (“100s of thousands in the first year rather than millions”), but a rapid scale up later: “Our mission is to have an appliance on every counter and a beverage for every occasion…
Price is a big obstacle
But does KOLD promise a sufficiently distinctive experience to warrant shelling out $1.12-$1.29 per serving for DIY beverages that aren’t hugely different from anything already available in ready to drink formats, where the unit price is considerably lower?
Howard Telford, senior beverage industry analyst at Euromonitor International, told FoodNavigator-USA price was a “big obstacle”.
Tom Vierhile, innovation insights director at Datamonitor Consumer, added: “The potentially game-changing innovation here is being able to do this without any carbon dioxide canister. That looks like a major advance over SodaStream as does the ability to dispense soft drinks cold right from the machine.”
As for customization, he said: “I thought this would be more Coke Freestyle-like, where you could mix and match flavors and make your own drink that way. I’m not sure if the KOLD machine can accommodate multiple pods at the same time (kind of like a CD player could accommodate multiple CDs) to attempt to do that. Something like that could help justify the price. If not, I don’t think there is enough there to justify the expense.”