At first, the presence of a single-serve coffee machine in your kitchen was a welcomed addition to your morning routine, a new gadget to play with, or even a conversation starter. But now that Keurig Green Mountain (NASDAQ:GMCR.DL) brewers are commonplace, that novelty has faded a bit. They're still convenient and all, but wouldn't be nice to have our precious counter space back?
Fortunately, Keurig and appliance maker General Electric (NYSE:GE) have found a solution: a coffee and tea brewer that's built in to your refrigerator door. Say hello to hot beverage convenience with none of the added clutter in your kitchen:
Just this week, GE and Keurig announced the launch of a GE Cafe series French door refrigerator that will come fully equipped with a K-Cup brewing system built into the door. It won't be available until later this fall, but the collaborative project already has the kitchen electronics industry buzzing -- and with good reason.
Let's take a closer look at what to expect from GE's new fridge, how the technology was developed, and what this means for both companies going forward.
How GE's fridge became a barista
While GE's upcoming refrigerator with an integrated Keurig brewing system will be an entirely new offering, it actually is an evolutionary step for one of GE's marquee kitchen appliances: the GE Cafe Series refrigerator.
Part of GE's line of restaurant-quality devices, the Cafe Series is no stranger to the high-tech kitchen. Back in 2013, the Cafe Series fridge introduced a fully interactive screen to the refrigerator door that was formerly a simple tap for water and ice cubes.
With that launch came customizable dispensing for various container sizes, as well as cold and hot purified water. The hot water function in particular was received with much enthusiasm, but the next logical step -- specifically from customer feedback -- was to integrate the entire hot beverage process into this increasingly "smart" appliance. So GE did just that. And here's how it will work, according to a video produced by GE's appliance division:
GE's new fridge won't come cheap. GE has attached a manufacturer's suggested retail price of $3,300 to this cutting-edge appliance. But, in addition to a coffee and tea maker, the Cafe Series will come with a few other perks, including a beverage station capable of measuring a precise fill, temperature-controlled drawers with LED lights, evaporators that monitor air humidity, and advanced water filtration.
Will this be enough to compete with the wave of new technologies being integrated into home refrigerators by competitors such as Whirlpool and Samsung? Only time will tell. But it doesn't hurt that GE's teaming up with one of the best brands in the drink business. Currently, Keurig offers over 400 varieties of K-Cup beverages from 60-plus major brands, including many best-selling American coffee products.
Why the integrated K-Cup makes sense
At a time when new kitchen technologies can devolve into senseless ideas -- like a Crock-Pot with Wi-Fi, for example -- GE's newest smart refrigerator appears not only practical, but also easy to integrate into our everyday routines. In addition, consider that the creation of the Cafe Series K-Cup fridge was driven by three themes that made its development particularly speedy and practical:
1. The Cafe Series already produced hot, clean water, so GE simply needed to incorporate the core of the Keurig machine -- the brewing pod -- into its dispenser.
2. To rapidly develop a prototype for a built-in Keurig brewing pod, GE relied on in-house 3-D printing technology to test and iterate.
3. Not only could this be a convenient, space-saving device, but it could also be one of the most advanced Keurig machines on the market: Each cup will be made from purified water, the dispenser will allow for remote-control programming, and the hot water can be pre-programmed according to your morning routine.
What this means for GE and Keurig
Though we've yet to see or test this new device, the concept itself seems like a positive development for consumers. GE appears to have validated that a market existed before investing heavily in new technology, which means that most of the risk will be borne out in the execution. And to determine whether this fridge will fly or flop, we can always hold off on buying until the experts have tested and evaluated the machine.
Of course, looking at this with an eye toward investing -- as we Fools are prone to do -- this new technology is much bigger news for Keurig Green Mountain than it is for GE. During 2015, GE is expected to complete the spinoff of its appliance business, cutting ties entirely when the Sweden-based Electrolux takes over the GE brand.
However, for the Burlington, Vt.-based coffee pod maker, the alliance with GE is the latest in a string of intriguing collaborations. Besides this one, the most recent moves include a massive investment by Coca-Cola and an alliance with Dr. Pepper Snapple Group. Both relationships bode well for the launch of the upcoming Keurig Cold machine this fall, which will likely open a new chapter for a company and a stock that just finished crushing the market's return in 2014.
It might be tempting to say that Keurig will cannibalize its own machine sales with this new GE fridge, but I think that observation would be missing the bigger picture. With each new major partnership, Keurig is steadily growing its footprint in the massive global beverage industry. After all, as the best-performing stock of the past decade, this isn't a company that thinks small.