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Why Keurig’s $300 Cocktail Machine Failed
The joint venture with Anheuser-Busch was no Juicero, but is still an object lesson on the need to test assumptions
Two companies needed a new growth vector. One was great at branding alcoholic beverages. The other was great at making home appliances that customers could use to create self-serve beverages. A match made in heaven! Or maybe not…
When companies make a product that has more to do with their own needs than with solving a real customer problem, the results are seldom pretty. One of the latest casualties? Drinkworks, the product of a joint venture between ABInBev and Keurig. Both of the parent companies have been grappling with strategic growth issues. People aren’t drinking as much beer as they used to (or at least as much of the kind that Anheuser Busch sells) and Keurig has long lusted after finding markets beyond coffee for automatic home preparation.
The history
Drinkworks was founded in 2017, funded by AB InBev’s venture fund, ZX, as part of a joint venture between the highly successful coffee pod maker Keurig Dr. Pepper and Anheuser Busch. The technology behind the at-home drink maker was underway at both companies, reportedly, for over ten years. While I don’t have any insider information, it sure looks as though when the two companies hit the “go” button, the recipe for landing in my “flops” file was in place. Lots of up-front funding, a big team, assumptions taken as fact, leaders totally bought in to the concept without the potential to change direction…and so it goes.
The product launched in St. Louis in November of 2018. The offering was a machine that one would buy for $299, plus a set of pods which contained all the ingredients necessary to create a great cocktail. The presumed customer?
As their CEO said at the time of launch: “The core person who really loves this idea is somebody who steps up above the ordinary: the person who hosts a party and makes up a cocktail or sets things up so that everybody can make something unique on their own. We can provide not only that but also a huge variety of drinks. And we give them back the time they would otherwise spend.”
