TERRY PRONE: Coffee-maker had rich market until customers gave it a roasting

THEY were wrong from the start, but that didn’t stop them taking off like a bullet, those tiny little plastic coffee pods you insert in a machine to make an alleged perfect cup of java. 

Consumer publications did taste tests to find out how delicious was the end result. Pretty delicious, it was. Even the most moronic or time-poor person could brew up a spectacular cup of coffee every time.

So the bottom-line market appeal was not dissimilar to the old push-point by which toothpaste manufacturers used to flog their product: Shame.

Folk were shamed into cleaning their teeth with a particular tube of goo, because otherwise their friends and co-workers would flinch from their halitosis. Likewise, coffee pods sold on the basis that people would no longer be shamed by handing such a lousy cup of coffee to a friend as to provoke a sneering twist of the lip.


Coffee snobbery had gone on the march in recent years. Rightly so, up to a point. Some of us remember when offices kept a bulb of pre-made coffee warm on a hotplate for hour after hour, so that someone desperate for a quick jolt of caffeine would find themselves getting a beverage that had the consistency of chicken stock and that delivered the sensory thrill of barely liquid creosote. The horror of this kind of coffee wasn’t just attributable to its longevity.

The types of ground coffee were limited. Then, coffee shops took a quantum leap into taste and re-trained everybody’s palate. Within a couple of years, everybody knew about Arabica and bought bags of ground coffee with descriptions printed on the front of the packet that promised “undercurrents of blackcurrant and honey with light touches of wheatgrass and spagetti”. To offer a visitor a cup of instant became a crime against nature, and to be told you brewed great coffee was like being awarded an Emmy.

The downside was that everybody felt they had to get that Emmy, and the peddlers of coffee made the brewing seem more challenging than a doctorate in advanced physics. Now, between you, me, and that chipped mug over there, making great coffee is as simple as boiling an egg, if not simpler. You don’t need a machine that looks like an antique train, with small metal cups into which to stuff ground coffee, and little appendages to steam the milk.

A cone of filter paper, a couple of spoonfuls of coffee and you’re good to go. If you run out of filter paper, kitchen rolls make a perfectly functional substitute.

But fear of coffee-making inadequacy created a powerful market for manufacturers of machines that required the owner to deploy only water, electricity and a pod. Like the printer manufacturers who could charge half nothing for their machines and then generate a semi-permanent market for inkjet cartridges, businesses like Keurig were setting themselves up for continuous selling of pods.

The K-pod business model is based on the assumption that, once hooked, the customer will spend roughly €50 per pound on the coffee contained in the K-Cups. That’s roughly five times the cost of even gourmet ground coffee bought in the bag. That’s an awful lot of money to spend to get around your coffee-making incompetence.

When the K-pod fad got going, the one thing that drove me nuts was the indestructibility of the waste pods. I could never figure out why the Green party, nor any other environmentally concerned group, didn’t get a few big black plastic bags, fill them with empty pods, and do a demonstration showing the sheer scale, the enormous bulk of these little horrors going into landfill, where they will take up space forever, or however long the half-life of plastic and tinfoil lasts.

Nobody did, and every second business, including medical clinics, bought these devices and the cute little presentation gadgets that hold every kind of flavour of pre-mixed coffee.

The K-pod people had their customers by the short and curlies. Then, they went too far. The company had provided reusable cups that the customer could refill from any coffee bag, thus meeting the needs of both the over-paid stupid coffee drinkers and the under-paid sensible ones.

But then, they got greedy and decided to force the under-paid sensible coffee drinkers to line up behind the rich dopes.

They brought out a new machine that was not compatible with the self-filling pods. It was also incompatible with earlier pods, and this seriously annoyed loyal customers. Their annoyance was nothing compared to the fury of the lads who had been filling their own pod with their own coffee.

Representatives of this outraged cohort took to social media — which should be called ‘anti-social media’ — and ate the face off Keurig. Keurig then took action which will put them, as a case study, into every PR course for the next 10 years, under the heading ‘How Not To Relate To Cross Customers’. They made a classic communications error. A chronic communications error. A communications error that happens so frequently that it keeps communications consultants in business mopping up the resultant corporate debris.

Keurig didn’t start with the people to whom they were talking. They started with themselves.

Instead of coming out with their hands up, they came out with their hands stuffed in their mouths right down to the elbow.

Their explanation related only to their own manufacturing and measurement problems. Customers had to be scraped off the ceiling and ended up yelling at the company that they, the customers, didn’t give a damn about manufacturing problems, they only gave a damn about their choices being constrained by the company’s desire to make more money than was fair and proper.

In tandem with the customers’ rage came competitor opportunism.

Fair dues to them, a family company named Rogers came up with a clip that could be affixed to any pod — including the infinitely reusable pod — and that would fool the new Keurig machine into thinking it was dealing with the new Keurig pod. The Rogers people sold this with the slogan ‘go forth and brew in freedom’.

This perfect consumer storm caused sales of Keurig machines to tank. They dropped by nearly a quarter. Now, I believe they were on the point of market saturation anyway, but the coincidence of the failure to force-sell the new machine and the hostile coverage generated by customers who were mad as hell resulted in a 10% drop in the share value of the company.

This was when the penny dropped, and, as the Washington Post put it, the company K-pitulated.

It apologised to everybody and promised a firm purpose of amendment. Specifically, they will teach their new machines to appreciate diversity and to embrace refillable pods without prejudice.

Anyone for a cup of corporate contrition?



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