I have blogged a few times about the struggles of Keurig (GMCR) here, here, and here. Their latest product, the Keurig Kold does not seem to be doing as well as GMCR had hoped. In the picture above, the Keurig Kold is being sold for only $199, down from their original price of $370 (the red oval and arrows are mine to draw eyes to the price). If the Keurig Kold was doing well, I don’t think they would be selling them so “cheaply”. Perhaps they are just experimenting with price points for consumers, attempting to get the supply and demand curves just right to maximize profits, but I don’t think so.
I sense trouble for the Keurig Kold.
Even at the “bargain price” of $199, I can buy 528, twelve-ounce cans of Coke at my local convenience store. That is 44 12-packs priced at $4.50 each. Yes, I can practically buy a pallet of Coca-Cola for the price of an “on sale” Keurig Kold.
By the way, this is only the price of the machine! You would still have to purchase the drink pods.
The price of 4 drink pods is roughly the same as a 12-pack of Coke. Yes, $4.49 for four, 8 ounce beverages.
Plus, it is not very convenient. Watch the video below and compare it with opening a refrigerator door and opening a can of Coke. Imagine having a few guests over and trying to use this machine. Which is easier, cans of Coke from a refrigerator, or waiting for overpriced Cokes to be spit out one-by-one? Also, don’t forget you will have to wash your dishes!
While this would probably be a fun gimmick or novelty item, I believe the charm would wear out quickly.
I am sorry Keurig, I do not see it happening. Apparently I am not the only one with doubts about the Keurig Kold’s and GMCR’s future, David Einhorn sold GMCR short again when nobody was looking.
Disclosure: I have no positions in any stocks mentioned in this post and have no plans to initiate any positions in any stocks mentioned at the time this was written. This post is for informational purposes only and is not intended as investment advice for anyone.