Bloomberg: Hand squeezing makes Juicero's $400 juicer superfluous

The Internet can be a cruel place.

That’s especially true when you or your company becomes the subject of a widely shared article where everyone piles on and has some fun at your expense. That’s exactly what happened last week to Juicero, maker of a connected juicer, when Bloomberg posted an article entitled Silicon Valley’s $400 Juicer May Be Feeling the Squeeze. In the article, the authors “scooped” that users could squeeze Juicero’s juice packs with their hands and get a glass of juice without using the company’s $400 cold press juicing machine.

The article soon went viral, resulting in thousands of tweets and retweets and dozens of follow on thought pieces that pointed to Juicero as an example of Silicon Valley excess. ‘Look’, they all seemed to say, ‘a company raised $120 million to create a $400 juicer for the home and you don’t even need it.’

So, was the article fair? And why exactly did the Internet decide that Juicero was so deserving of mockery?

To figure that out, let’s take first take a look at the article that caused all the commotion.

The Bloomberg Article

The article’s main focus centers around the fact you can squeeze the juice packs with your hands to pour a glass of juice. Bloomberg even created a video titled “Do You Need a $400 Juicer?” in which they showed a side by side comparison of a person hand-squeezing the Juicero packs and the Juicero machine squeezing a pack to create a glass of juice. The video is narrated by a text overlay that declares at the end of two minutes, “no expensive juice machine needed.”

The authors go on to tell us about how two investors in Juicero were surprised to learn that you could squeeze the Juicero packs and get roughly the same amount of juice. They tell us about how “one of the investors said they were frustrated with how the company didn’t deliver on the original pitch and that their venture firm wouldn’t have met with Evans if he were hawking bags of juice that didn’t require high-priced hardware.”

In short, the article has all the necessary ingredients to create a collective Internet gasp, in which everyone agrees about the silliness of investing in company that created an expensive juicer that you don’t really need.

But was Juicero deserving of all this mockery? And, in the end, was it silly to invest $120 million in a company that created a cold press juicer for the home that users could make superfluous with their own hands?

Here are my thoughts:

Juicero brought much of this on themselves.

At this point, every company should know that by proclaiming that your company is creating a “platform” and is trying to, in its own way, change the world, you are setting yourself up for some take-no-prisoners commentary when you stumble.

Take this tweet from CB Insights CEO Anand Sanwal:

In today’s world where shows like HBO’s Silicon Valley regularly skewer the tech industry’s self-importance, any talk about changing the world with high-priced products that are largely targeted at higher-income consumers is ripe for poking some fun at.

You Can Hand Squeeze The Juice Packs. So What?

Yes, you can hand-squeeze the juice packs. But here’s the thing: if you’re paying $5 to $8 for a glass of juice, chances are you’re the kind of person who will pay for the convenience of a $400 juicer to do that for you every morning.

Before you disagree with me, I’d suggest to first do the math: If you are a home juicer who wants to spend $50 a week on Juicero juice packs, note this will come to about $2500 a year. If you have enough money to spend $2500 on your juice habit, you have enough money to spend $400 on a device to save you a little time and hand fatigue every morning.

This doesn’t even consider professional markets, where Juicero is finding some early success, where multitasking restaurant or cafe workers don’t have 2 minutes to squeeze juice from raw vegetables and fruit into a glass.

The Investment Was Significant, But It Was For More Than Just a Home Juicer

What the Bloomberg article fails to mention is the $120 million invested in Juicero went to more than just the creation of an expensive home juicer, but also to the creation of a full delivery system, which includes the company’s own factory to make the juice packs.

Back when Doug Evans was looking to create what became the Juicero, he tried to find a food packing facility that could create his juice packs, which would involve taking raw fruits and vegetables, putting into small delivery pods, and getting them out to the end user in a matter of a day or two since the packs had a shelf life of about a week.

In the end, he couldn’t find anyone that could meet those timelines needed for this new system so he decided to create his own factory.

My guess is much of the capital went towards the creation of this full end-to-end pack based delivery system.  Sure, that doesn’t hide the fact that $120 million is a significant amount of capital to entrust to a CEO who’s previous juice company eventually went out of business (ed note: after Evans had sold it off to another company), but I think the vision is a bigger one than was portrayed in the Bloomberg story.

It’s Might Be a Platform. But It Is Definitely A New Delivery System…For Juice

Above I discussed that where Juicero got into trouble is when they called their cold press juicer and pack-based delivery system a ‘platform’. The word platform is an overused one today in Silicon Valley, in part because VCs so love a word that connotes a bigger idea and ultimate return on investment, especially when the alternative in the hardware world is something that might be termed a “gadget”.

Who wants to invest $120 million in a gadget?

What the company probably should do more is talk about their end-to-end delivery system for fresh juice, which is in a sense something no company had created before. Sure, you can buy “cold-pressed” bottles of juice at the grocery store, but those bottles were cold-pressed in a factory, not in your home. You can also press juice from raw ingredients the old fashioned way, but the result is a mess and 30-60 minutes of your morning down the drain after you’ve cut, sliced, juiced and cleaned up.

Bottom Line: My view is the Juicero juicer and delivery system is focused on creating more convenience for the home juicer in a market in which hardware alone is a $3 billion business. That’s before one factors in how much people spend on the raw ingredients for juice, which I am sure far exceeds the amount spent on hardware.

In creating its juicer and delivery system, they spent a lot of money, and may have over-engineered the juicer and added extra cost to the machine. But, they’ve also likely created defendable intellectual property and a delivery model that could see significant traction in both professional and home markets over time if they can defend that IP.

Will it pay off? Too soon to tell. But regardless of the ultimate end result for the company, I don’t think the fact you can hand-squeeze their juice packs will be the determining factor in the success or non-succes of the company.

1 COMMENT

  1. “Sure, you can buy ‘cold-pressed’ bottles of juice at the grocery store, but those bottles were cold-pressed in a factory, not in your home. ”

    Right, but the outrageous thing here is that you are purchasing something very similar to juice that has been cold-pressed in a factory. The pouches are full of finely ground-up produce, nearly a puree. Their platform is to provide sacks of chunky smoothies and a gimmicky device that transfers them into a cup for you minus the fiber.

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