With Keurig Cold and Keurig 2.0, Green Mountain Coffee Roasters is tapping into specific consumer needs.
The Waterbury, Vt.-based company discussed its two forthcoming home beverage systems during a Feb. 19 presentation at the Consumer Analyst Group of New York conference in Boca Raton.
Keurig Cold, the product of a strategic partnership with the Coca-Cola Co., Atlanta, was designed to offer convenience, choice and a fresher alternative to traditional bottled beverages.
“With the Cold system, what the consumer issue predominantly is the difficulty of shopping and lugging home large bottles or can packs, and then not having room to store them,” said Brian Kelley, president and chief executive officer. “The most important piece, (consumers) told us, was the multi-choice of brands, that I now have the ability to have all the brands for my family in my home and have the ability to brew them singly and freshly without having to open a large container that may not get used for a bit.”
A third element is the freshness factor — a more critical quality for cold beverages than hot drinks, Mr. Kelley said.
“The reality is, we will be making those products in the home,” he said. “The first time those products will meet water is in the home.”
To develop the platform, the company had to overcome several technological obstacles.
“First it needed to be cold,” Mr. Kelley said. “It needed to come out quickly and chilled.”
Carbonation without the use of a CO2 tank and precise dosing of bubbles and syrup represented other priorities for the platform.
“And we had to do all of this within the space constraints and the rough dollar range that we’ve learned is very, very important to consumers in their home and on their counters in their kitchen,” Mr. Kelley said. “That means about the same size as a Keurig and roughly the same price.”
Offering multiple, large-scale brands also was a must, as an important component of the company’s hot system.
“And so, with Keurig Cold, we will now be able to freshly prepare carbonated, sparkling, and chilled beverages, a wide variety, the wide variety that you enjoy today with one-touch Keurig simplicity and variety and ensure that we have a consistent taste every time, so that we can get the largest brands into the systems, so that we can get multi-brands that consumers love and give them the Keurig empowerment at home, to allow them to have the choice in their home that they see in the store.”
Green Mountain’s other big innovation was designed to address a different set of consumer needs. The Keurig 2.0, scheduled to launch later this year, offers the option to produce a single cup or full pot of coffee. The insight to brew multiple sizes came from company research: Mr. Kelley said 80% of households use traditional coffee-making methods instead of single-cup brewing, and in households with Keurig machines, a fourth of coffee is made via another method, such as traditional drip.
“When you ask a consumer, ‘why have you not yet bought a Keurig?’, the No. 1 reason, absent price, is it does not brew a pot or larger size,” Mr. Kelley said.
Keurig 2.0 will brew K-Cup single-serve packs as well as K-Carafe packs, which produce 28 oz of coffee, and eventually additional sizes, such as K-Mug packs, he said. Equipped with interactive technology, the machine recognizes the capacity of a pod to produce the optimal brew.
“First, it brings new households into our Keurig system,” Mr. Kelley said. “Second, it drives increased consumption in households that currently have a Keurig. And finally, it drives incremental volume profit and value to all constituents along the chain.”
Consumer empowerment drives innovation efforts at Green Mountain. Identifying opportunities in other beverage occasions has led the company to evolve beyond its coffee roaster roots. With Keurig’s initial launch, options included only black coffee and black tea. Over time, iced coffees, wellness coffees, sweet coffee beverages and cocoas and brew-over-ice coffees and iced tea were added. More recently, the company has included a range of fruit brews, such as hot apple cider and brew-over-ice fruit waters and lemonades. With Keurig Cold, the company said it will exploit a wide range of categories.
“When people ask, they often ask, ‘So are you a coffee company? Are you a beverage company? Are you a technology company? What are you, exactly?’” Mr. Kelley said. “The answer really is that we are a personal beverage system company. And that is unique; it’s an innovative, values-based, technology driven personal beverage system company, and that’s really made all the difference.”
