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5 Reasons Why Keurig Kold Will Fail

Image source: Keurig Green Mountain.

It took a long time for Keurig Green Mountain to roll out Keurig Kold, but now that the carbonated beverage maker is here, it's hard to get excited.

The Keurig Kold may make chilled brand-name sodas in all of 90 seconds, but it's a very flawed machine serving an even more flawed niche.

As much as it pains me to say this, as a longtime Keurig Green Mountain bull and investor, this is shaping up to be a colossal dud that could make Keurig 2.0 -- a flop that I saw coming, too -- a relative victory. Let's go over the many reasons why Keurig's new kitchen appliance could be doomed even before this holiday shopping season starts.

1. Keurig Kold isn't convenient

The ability to deliver cold carbonated beverages may be billed as a 90-second process, but it technically takes longer than that. Unlike a Keurig coffee brewer that can get going shortly after it's turned on, Keurig Kold needs to be powered up at least two hours ahead of time to make sure that water reservoir is chilled to a cool 39 degrees Fahrenheit.

This means that the desire to make a soda either needs to be pre-planned a couple of hours earlier or you have to deal with the energy-sapping call to leave Kold on all the time.

2. The machine isn't cheap

Keurig Green Mountain began selling the appliance exclusively through its website on Tuesday for $369.99. It does include a pair of specialty glasses -- and the first wave of buyers are getting a $20 discount on checkout -- but it's still too expensive.

SodaStream 's soda makers aren't selling, even with markdowns taking entry-level models down to as little as $80. Why should Keurig Kold succeed at a substantially higher level?

3. Making soda at home isn't about saving money

SodaStream tried and failed to market its product as a value, but Keurig Green Mountain doesn't even have that luxury. If you want to make a Diet Coke or Canada Dry Ginger Ale at home, it will set you back $1.25 for an 8-ounce serving. That's the price of a Kold pod. Think about that. We're talking about paying more for a pod than a 12-ounce of soda. Making the equivalent of a 2-liter bottle of Sprite would set you back $10 in Keurig pods. That's ridiculous.

People expect to pay more for premium coffee than a soda in the real world, but Kold pods cost roughly twice as much as a Keurig K-Cup. Now we now why Keurig Green Mountain was able to get two soda giants to back the platform. It's not going to cannibalize retail sales.

4. Soda consumption keeps slipping

The U.S. carbonated soft-drink market has declined for 10 consecutive years. The trend is real. Sparkling water and flavored sparkling water are holding up well, but if that wasn't enough to save SodaStream, why should work for Keurig Green Mountain?

We're at the lowest level of soda consumption since 1986, according to industry tracker Beverage Digest. That's not a trend that appears to be reversing anytime soon, especially since diet sodas have been fading even faster.

5. Availability is a concern

Keurig Green Mountain is taking things slow. Keurig Kold is only available through its website, and in a few weeks, it will be available in only a handful of markets. It doesn't see mass-market distribution until next year, and that might be a challenge if it doesn't take off.

If the machine doesn't get it right out of the gate, it's going to be hard for mainstream retailers to begin stocking up on expensive starter kits and costly pods that don't sell.

Keurig Green Mountain will continue to sell a ton of coffee brewers and K-Cups. Bulls will just want to rethink Keurig Kold as a catalyst for growth. It's going to be more flat than fizzy.

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The article 5 Reasons Why Keurig Kold Will Fail originally appeared on Fool.com.

Rick Munarriz owns shares of Keurig Green Mountain and SodaStream. The Motley Fool owns shares of SodaStream. The Motley Fool recommends Keurig Green Mountain. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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