When Juicero first announced its connected cold press juice machine, all anyone could talk about was the price.
Sure, a seven hundred dollar price tag is enough to induce sticker shock, but when you raise north of $100 million to build the first Keurig-like pod system to make cold-press juice at home – and even build your own pod factory in California to achieve such a feat – a higher price makes some sense.
Still, despite early success in the restaurant and work markets for their connected juicer, the company’s management knew it would need to bring their price down if they were to find success in the consumer market.
Why now? According to company CEO Jeff Dunn, they decided on a permanent price drop only after the company saw orders surge to twice their normal rate after a Black Friday sale.
But here’s the thing: increased unit demand should not have been a surprise. Lower pricing is the most important level to pull if you want to increase unit sales. It’s clear management thinking changed along the way since they had originally planned to lower prices a year to 18 months from now with the launch of their second-generation juicer.
One reason for lowering the price could be increased competition. Recently at CES, a Juicero clone by the name of Juisir was on display and, before long, the product showed up on Kickstarter. (Interesting story about the man behind Juisir, Leo Chen, a Chinese pharmaceutical heir who had a previous hit with his Nespresso clone for tea).
Admittedly, the Juicero price drop is probably not a direct response to the arrival of the Juisir, a product that may not ever ship in the US since it looks to violate some of Juicero’s intellectual property.
Still, company management probably saw the writing on the wall. Juicero is currently in a competitive window where they are the only product on the market with a pod-based cold-press juicer. They also recently hired a new CEO from Coca-Cola with experience running a large consumer beverage operation at scale. And, make no doubt, competition will likely come if Juicero shows the model works.
The company’s board could have prodded management to make a price drop. With over $100 million invested, they no doubt want to see hockey stick like growth curves, something they were never going to see at a $700 price point. So with competition coming, anxious investors, and a new CEO who built a career scaling large beverage companies, the Juicero price drop makes sense.
And after all, in Silicon Valley, timing is always of the essence.