Keurig Green Mountain is a specialty coffee company.

It sources, makes, and sells coffee, hot cocoa, teas, and other beverages under various brands in portion packs for its Keurig brewing system. The Keurig brewing machines are very popular. A coffee drinker buys a Green Mountain portion pack. You simply pop a pod into the slot, press the 8 oz.-size button, and then place your mug under where the machine dispenses the coffee.

In 2015, Keurig decided to launch an at-home soda machine, the Keurig Kold. The idea was to create a product for soda that shared characteristics with the Keurig coffee machine. The Kold would allow people to quickly make single servings of soda in their homes. Keurig had high hopes for the Kold. The company even suggested that the Kold might outsell the firm’s coffee makers where the estimate is that these machines are in about 33 million households.

As it turned out, the Kold was quite the failure. Nine months after it debuted, Keurig pulled the Kold from the market. What went wrong? Several things, which makes one wonder what type of feasibility analysis, if any, the firm completed prior to offering the product for sale. Consider the following facts as causes of “what went wrong.”

1. It was too expensive. The machine debuted at \($369.\) In comparison, the cheapest SodaStream model, which also allows people to make single-serve sodas at home, costs \($79.\) Every 8-ounce soda the Kold made costs about 50 cents. By comparison, a 12-pack of branded-soda products, such as Coke, Dr. Pepper, or Pepsi Cola, can usually be bought at Walmart and other discount stores for about \($4.50,\) which is 37½ cents for each 12-ounce drink.

2. It was too big, loud, bulky, and inconvenient. As soon as the Kold came out, buyers complained that it was too big and took up too much counter space. If you are interested, go to Google Images and type in Keurig Kold to judge for yourself. It was loud. It also had to be plugged in to work, meaning that one could not conveniently take it on a picnic or use it for an outdoor barbeque unless electricity was readily available.

3. The pods only came in one size. The Kold made a single 8-ounce serving of soda from disposable pods of syrup. There was no way to increase the drinks’ size. Most cans of soda are 12 ounces. Soda fountains in restaurants or convenience stores often offer much larger sizes.

4. Soda consumption is on the decline. The Kold rolled out at the same time the U.S. population is reducing its soda consumption for nutritional and health reasons.

5. Who “brews” soda at home? Kold was asking people to change their behavior—something that is hard to do even if every other aspect of a product is perfect. People have always made coffee at home. The Keurig coffee machine provided a more convenient and efficient way for people to do something that was already being done. But people have never made soft drinks at home. The Kold’s challenge was to not only make a soda maker but to sell people on the idea of making soda at home.

Although Keurig is a large company, the failure of the Keurig Kold is an important reminder for startups and young firms. It is vital for a company to determine if a product is feasible before, rather than after, introducing it into the marketplace. And this just does not pertain to product feasibility analysis only. Indeed, all four phases of feasibility analysis discussed in this chapter are important and vital....

Discussion Questions:

1. Of the five facts that contributed to Kold’s failure, which one do you think was the most damaging?
Explain your answer.
2. Describe the feasibility analysis that Keurig should have conducted prior to debuting the Kold. Do you think Keurig would have produced the same product had the firm followed your recommendations? In what ways do you think the product would be different?
3. Why is it so difficult to change people’s behavior? How would you have gone about convincing people that making soda in their home is a good idea?
4. Write a 200-word essay on what a startup can learn about feasibility analysis from the Keurig Kold failure.