Now that Black Friday and Cyber Monday have come and gone -- and Keurig Green Mountain (GMCR +0.00%) is no longer selling Keurig Kold machines at $199.99 -- it's probably a good time to read the carbonated tea leaves. Keurig's new maker of fizzed-up beverages has only been on the market for two months, but the signs seem pretty clear that it's not going to cut it at its original $369.99 price point.
The temporary 46% price cut was disguised as a holiday sale, but would Keurig Green Mountain be stubborn enough to think that it could settle back in at its out-of-touch price?
"If smoking out new buyers has been hard so far, imagine how it will be when folks realize that they missed the narrow window to buy it under $200," I wondered over the holiday weekend. "They're not going to jump on the platform at all, making it surprising if Keurig Kold's retail price remains at its original sticker in the future."
Well, a visit to Keurig's website earlier today offered a juicy clue as to how the company best known for its single-serve coffee brewers is going to tackle the difference its pricing dilemma in the near term.
Image source: Keurig Green Mountain.
Arriving at the Kold shopping page on Keurig's site involved taking a leap of faith. One had to add the carbonated beverage maker to the cart to see what the "discount applied" would be, and it turns out that it wasn't marked all the way down to to the holiday weekend's sale price. It came out to $299.99, a $70 reduction.
It's easy to see why Keurig Green Mountain didn't want to push out a drastic price cut. The handful of early adopters who bought in at $370 -- or $350 given the initial $20 discount in early October -- would be clamoring for a refund. They would feel stiffed and rightfully so. Even video game consoles and TVs that are prone to evolutionary price cuts wait at least a year before gunning for the masses at cheaper prices. However, it's clear that this puppy isn't going to sell at $369.99. Even Keurig Green Mountain's modest goal of selling 60,000 to 100,000 of these in its first year just isn't going to happen at that price.
Someone will want to tell that to Bed Bath & Beyond (BBBY +0.00%), the housewares retailing giant that was instrumental in getting the Keurig coffee brewer to take off a half-dozen years ago. It followed Keurig's website in offering Kold at $199.99 through Tuesday's end of the Cyber Monday sale, but now it's back at $369.99 as if soda-thirsty consumers aren't smart enough to shop around.
Keurig Kold is in for a rough rookie season. Because the pods contain the actual proprietary carbonation process, an investment in the machine is also an investment in Keurig Green Mountain continuing to support the platform. However, even if Oprah Winfrey were giving away Kold brewers, it would still be an uphill battle. The machine needs to be on for at least two hours if owners want a chilled carbonated beverage. They also have to pay a stiff $1.25 for a tiny eight-ounce serving of brand-name soda, a lot more than just buying it canned or bottled at the store.
Keurig Kold at $299.99 through Keurig.com may be another of these temporary discounts, but it probably won't be the last.
