Lately it seems like every time a new kitchen-related appliance appears on the scene, it’s deemed the new “Keurig for X” model: beer, wine, juice, smoothies, cocktails, and now even cookies. What is it about the idea of a plug-and-play model that appeals to both customers and budding businesses?
On the consumer side, people want something easy and intuitive to use (call it the Apple-ification of our world). Further, calling a new device the “Keurig for X” boils down the high-level technology to a digestible sound bite, reinforcing how easy the tech will be to use.
On the business side, these devices feel like they’re tailored for each individual’s tastes but in fact are pretty standardized and right out of the box. Even though they differ in vital ways, each has mastered the idea of recurring revenue, so important for Keurig’s success. For example, in 2010 it made $330 million by selling brewers but $800 million in K-Cup capsules. That makes this model less like a hardware company and more like a tech company (with constant software upgrades and the associated fees).
But in order to master success, companies need to keep the customers’ attention beyond replacement packs. “You have to understand, we’re a one-trick pony,” Keurig’s Dick Sweeney told Boston.com a few years go. “We have a brewer and a K-Cup. We don’t have a cellphone or a flat-screen TV or a microwave to fall back on if the brewer doesn’t make it.” In other words, there’s more opportunity when the devices are connected to smartphones and other tech, but in the long run, to stay ahead of the game, companies need to continue to innovate.
They also need to figure out how to get costs down. A $700 juicer works in a Silicon Valley office environment and is a great initial business model, but to expand that success and customer base to the home market, prices need to drop. An entry-level Keurig model will only set you back about $100, which means every home could have one.
Or maybe, just maybe, we need to stop creating gadgets that resemble the Keurig in any way and instead focus on involving people in the everyday process of growing and making food and drinks so that it’s fun and exciting rather than a chore to be simplified.
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