Speculation: when Brian Kelley, current president and CEO of Keurig coffee, was a little boy, nobody ever read him the fable of the goose that laid the golden eggs, which is why he made it all the way to adulthood without learning that excessive greed is often fatal to cash cows (if you don't mind mixing a metaphor).
You're surely familiar with Keurig and its K-cup single-serving coffee (or tea or cocoa) pods; in the past few months, the company has also announced intentions to branch out into the single-serving soup and at-home soda fountain markets.
But Kelley and Keurig dislike the thought of customers using non-Keurig-branded coffee in their machines, which is why Keurig plans to install what TechDirt calls “the java-bean equivalent of DRM” (digital rights management), to ensure that only official Keurig-branded K-cups may be used in the next generation of Keurig coffee makers.
Foodnavigator-usa.com quoted Kelley as saying this:
“We will be transitioning our lineup of Keurig brewers over fiscal 2014 and early 2015. While we're still not willing to discuss specifics about the platform for competitive reasons, we are confident it delivers game-changing performance.”
Kelley's confidence is surely justified; going from ordinary coffee pods to DRM encryptions will definitely be “game-changing.” Of course, anybody with a thesaurus (or English-language fluency on par with an 8-year-old native speaker's) known that “game-changing” and “game-improving” are not synonymous. Though Kelley did, of course, make a game (or gamy) attempt to portray them as such:
“To ensure the system delivers on the promise of excellent quality beverages produced simply and consistently every brew every time, we use interactive technology to help us perfectly brew all Keurig brew packs. Because of this the system will not brew unlicensed packs.”
Of course. That's why Keurig is doing this: to protect poor benighted customers from the complex inconsistency of unlicensed coffee beverages! Who could doubt such dedication to customer satisfaction?
The cynics at TechDirt, among others. Here's what they said:
“As with computer printers, getting the device in the home is simply a gateway to where the real money is: refills. But Keurig has faced the "problem" in recent years of third-party pod refills that often retail for 5-25% less than what Keurig charges. As people look to cut costs, there has also been a growing market for reusable pods that generally run anywhere from five to fifteen dollars.”
In other words: TechDirt thinks this merely a ploy by Keurig to get more money from its customers (assuming said customers wishing to brew their own all manage to forget about the countless non-Keurig-brand options already on the market).
The Verge also believes Keurig's move is all about getting more money, if its headline “Keurig is locking down its coffee makers to keep out cheap refills” is any indication.
Nor did Slashgear seem persuaded by Kelley's pro-consumer arguments, noting:
“As for why consumers themselves might decide to "upgrade" to a more restrictive platform, Kelley's argument was vague. The Keurig 2.0 system is "a better one" than the existing version, he suggested, claiming that brand loyalty would be a big part in the replacement process.”
Keurig's patent on K-cup technology expired in 2013, which is why off-brand or refillable K-cup-style coffee pods have exploded all over the market since then. That's also why Keurig's fourth-quarter results for fiscal year 2013 suggested that up to 12 percent of all coffee or tea pods brewed in Keurig machines came from “unlicensed third-party” sources.
A cynic might suggest this proves that “brand loyalty” among Keurig drinkers isn't as high as CEO Kelley would like to believe. Of course, right now all Keurig machines in existence work with any brand of properly sized pod, unlike the planned Keurig version 2.0 with its RFID-chip limitations.
Is the brand loyalty of existing Keurig drinkers high enough that they'll pay for an “upgraded” machine that actually limits their options? CEO Kelley seems to think so; whether this means his advisers are wise pragmatists or brown-nosing yes-men is still up for debate.
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