Keurig coffee makers have likely invaded your friends’ kitchens already, and the high-tech brewer will storm more counters before the year is done. Keurig Green Mountain (GMCR) estimates that 20 million U.S. households use its brewers, and the company is betting that its new Keurig 2.0 machine—and the barrage of advertising behind it—will entice shoppers to buy millions more in the weeks leading to the holidays.
The company, like many others, relies on end-of-year holiday sales. Keurig sold about 10.9 million of its brewers in the 12 months ended in September, according to the company’s annual report. About half of those sales were between October 2013 and December 2013. All this gifting helped make Keurig the second-best-selling coffee maker brand after Mr. Coffee, according to 2013 data from Euromonitor International.
In the holiday spotlight this year is Keurig 2.0, whose launch in August marks a transition period for Keurig, which is gradually phasing out the old machines and pods. It’s the first Keurig to make more than a single cup of coffee at a time (the brewer can fill a four-cup carafe). This not only allows Keurig to attract customers who had no need for a single-serve coffee maker, it also satisfies the more than 70 percent of its existing customers who said they wanted a larger brewer. Chief Executive Brian Kelley said during an earnings call on Wednesday that the brewer’s debut is “by far the largest and most significant product launch we’ve ever accomplished.”
Keurig is hoping for a boost from 2.0 during the vital holiday retail season, after sales slowed last quarter to 2.4 million brewers, from 2.6 million during the same period in 2013. To make sure of it, the company’s investing heavily in marketing its newest machine. It’s midway through a two-month advertising blitz that includes national and local TV spots, in-store demonstrations, tasting events in New York, Miami, Atlanta, and L.A., and Keurig popup kitchens and stores, which are all focused almost exclusively on Keurig 2.0.
And Keurig isn’t just looking to conquer the coffee market. Next fall, the company will launch its cold brewer, which will make soda and noncarbonated drinks—just in time for the 2015 holiday season.
(Bloomberg Businessweek)
