All latte highs come to an end... That's the message from a Morgan Stanley analyst who downgraded K-Cup icon Keurig Dr. Pepper. Shares fell 4% after he said the single-cup coffee's explosive growth era is ending. Blame Keurig's patent expiration and competition from Nespresso.
You take that mid-week cosmo shaken or stirred?... Cocktail mixing is now automated thanks to the recently-announced Keurig "Drinkworks" machine. It's a joint venture with Bud-owner AB-InBev, but the partnership is a result of both companies' insecurity: slowing growth.
- The dream: If you already toss in Keurig coffee pods in the morning, a Drinkworks cocktail was strategically conceived as your Keurig product in the evening.
- The reality: That $4 Moscow Mule pod may save you compared to $10 at the bar, but the $299 Drinkworks machine isn't cheap.
- And the history: Keurig's had partnership problems before — Its "Keurig Kold" creation with Coca-Cola was shut down in 2016.
The "razor and blades business model" isn't working here... That's when you sell one cheap item (razor) then make money off expensive refills (razor blades). Or your printer and its absurdly-priced ink. Keurig embraced the same model, but fresh competition makes its "cheap" entry pod machines too expensive to ever start.