Keurig Green Mountain stocks dove 12 percent, whlie sales of the Keurig brewing machine fell 23 percent in the first quarter of 2015. The sales have decreased significantly since this time last year, which includes the sales of the brewing machine along with the accessories, and it seems that the days of everyone wanting to get a Keurig might be over.
Keurig Green Mountain Chief Financial Officer, Fran Rathke, said on a phone call, “We do have some headwinds.” The company was trying to explain why the sales have fallen 23 percent since this time last year, but the biggest issue the company says is that so many Keurig machines are sitting in the stores. People have not been purchasing the Keurig machines or accessories quickly, with the newest model 2.0 really not doing well in the sales department. As sales fall and machines stay on the shelves at the retail stores, the investors are running away from the Keurig stocks as quick as they can. The Keurig stocks have dropped 12 percent in the after market hours, with shares already being down near 20 percent on the year. In 2013 and 2014, Keurig Green Mountain had over $1 billion in sales, and was one of the most popular stocks in both years.
The CEO of the company, Brian Kelley, has said he was listening to the customers and what they wanted, and he was ready to make the change for the better. One of the biggest things customers have been complaining about was that the 2.0 model of the Keurig brewing machine only brews the Keurig brand name coffee cups, which means that customers cannot use other brands or types of coffee with the machine. Kelley said that “Quite honestly, we were wrong. We underestimate the passion the consumer has for this.”
A lot of the Amazon.com reviews show the negative side of the brewing machine, with thousands of complaints about not being able to use any other coffee cups except the Keurig brand. This was something specifically designed wrong with the 2.0 model, and people are really upset they bought this product and are unable to use various coffee cups. The first model allowed you to use the different types of coffee cups, so people are mostly upset that this great feature of the brewing machine was taken away from them without warning or reason.
Keurig says that the My K-cup accessory will be coming back, which is what you need to use if you want to brew other brands of coffee in the brewing machine. Keurig says that there will also be a Keurig KOLD system coming out in the fall, which will hopefully revitalize the enjoyment people get out of the Keurig machines, and the premise involves on brewing cold products at home in a new way. The company however did lower projections for 2015, even with the new KOLD product coming out, saying that there are challenges relating to “complex product transition” which is basically code for people being upset with the 2.0 model. Keurig did not say when the My K-cup accessory will be coming back or or how much this will cost for the 2.0 model that does not currently allow the use of other branded coffee cups.