Keurig revenue is down, having overexposed itself

Tom Dougherty, CEO – Stealing Share

22 September 2016

Could sagging Keurig revenues signal a trend?

I have long expressed my addiction to coffee. It’s big time, friends. I can’t control it and I am not ashamed to admit it. My habit is so intense that every morning, even before I hit the shower, I’ve already downed two or three cups.

Sipping my first cup of coffee brings me to the light. It pulls me out of my morning grog and massages my mind into a semblance of alertness. The second cup drops me at the doorstep of normalcy. While the third and fourth give me pizzazz.

Keurig revenue

Could Keurig be overexposed?

For years, I have been relying on a Keurig machine to provide caffeinated goods. My first machine came my way back in 2008 (crazy that I can remember that, isn’t it?).

There was something so cool about plugging a K-cup into the mouth of the machine, hitting the brew size and getting a piping mug a minute later.

Even if the coffee wasn’t as complex tasting as a traditional pot of coffee, the process was different enough from the norm to keep me coming back.

Since then, K-cups have become the new standard. Which, ironically, isn’t all that good for Keurig.

“As a coffee drinker, I move in fads. My fad now is the French press. The next one might be the slow pour.”

Keurig has oversaturated its own market

Back when I wrote about my love of Nespresso, I failed to mention that it’s greatest power is the brand’s scarcity. Scarcity can be a value for any brand because we instinctively want it more if it’s not easily available to us.

It may seem counter-intuitive, but sometimes brands actually lose market share when they are too available.

Krispy Kreme used to be a destination because it had a niche feel. But when it expanded too fast and opened stores all across the nation, its sales actually dropped.

I do drink coffee from K-cups with reckless abandon, but my preference is waning. In fact, I recently unplugged the machine and dusted off a French press.

I have found pleasure in selecting locally roasted  beans that I can brew just about as quickly as I can a K-cup.

I am not surprised that Keurig revenue is falling. Moreover, the moment it instituted the Keurig 2.0 and Kold machines I sensed bad times were ahead. Keurig, a company that once held the market in the palm of its hands, has become less special.

As a coffee drinker, I move in fads. My fad now is the French press. The next one might be the slow pour. After that, who knows,? Perhaps a Bialetti? Throughout, I am sure I will have K-cups, but I won’t consider the experience all that unique anymore.

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