Green Mountain (Keurig) stocks have dropped by 10% and it now says that it was wrong about DRM coffee pods that force consumers to buy licensed pods only.
Now, the company will restore “My K-Cup” reusable filters, and permit more external brands.
According to the news by arstechnica.com on Keurig, the coffee company has given something of a “through my fault” on a Wednesday night, when the CEO accepted that they were wrong in making its 2nd generation of coffee machines with a technology that prevents the users from brewing their own cup of coffee independently of Keurig’s licensing. The Keurig Green Mountain stock was down nearly 10%.
In 2014, the company drew the wrath of the internet by implementing a type of coffee DRM (Digital Rights Management) on the pods used in their Keurig 2.0 coffee machines, according to the news by Techdirt.com. This next-gen of Keurig’s coffee machine will force its users to brew with only Keurig-approved pods exclusively, by utilizing a scanner that searches for an ink mark on K-cups. Keurig also discontinued the reusable pod “My K-Cup”, which means the users can no longer use their own coffee with Kuerig coffee machines.
Consumers’ responses were swift and they soon discovered that by placing a piece of tape over the scanner, they can simply override the “Oops” text that outside-brand coffee pods received from Keurig coffee machines. A family owned company named the Rogers Family Company Coffee & Tea Market, even made its so called “Freedom Clip” which has the same purpose as the tape but with a better name for it. They made the Freedom Clip available and for free when they found out about the attempt by Keurig to offensively lock out other coffees.
Even though the Keurig Company’s total revenue went up by 2% on the quarter, their sales of brewers & accessories were also down by 23%. Even though their pod sales went up by 14%, Fran Rathke, Keurig’s chief financial officer said that the shipments of their pods by volume are below their expectation because of a ‘somewhat relatively higher than the expected costumer price elasticity in retail”.
Brian Kelly, Keurig’s President and CEO said that some of the slack was due to the consumer’s confusion about pod compatibility. Brian Kelley also added that the company was rushing to include unlicensed coffee pod brands so that their coffee machine will work with “another 70+ brands for about 500+ varieties” rather than their own Keurig coffee pods.
Thankfully, now that Roger Kelley says that they will bring back the “My K-cup” reusable filter, for “few. but passionate” number of users who really insisted on brewing their own coffee using Keurig coffee makers. These few passionate Keurig coffee maker consumers made it clear that they really wanted the “My K-cup” reusable filters back and made the Keurig Company aware that consumers want the freedom to brew every brand and any brand of coffee with their coffee maker, and giving back the My K-cup allows that. Roger Kelley admittedly said that they were wrong to take away the My K-cup and underestimated the enthusiasm that costumers had for this. Now the company will bring the My K-Cup filter back and it will be available in their Keurig 2.0 just in time for holidays.
Date: May 9, 2015