Keurig CEO Sort Of (But Not Really) Apologizes For Company's Ridiculous Foray Into Obnoxious Coffee DRM

from the We're-sorry-for-being-a-little-too-innovative dept

You'll recall how last year, Keurig Green Mountain created a surprising, negative public relations tsunami with the news it would be using a form of "coffee DRM" in its latest Keurig 2.0 coffee maker. The new technology basically prevented anyone from being able to use refill pods from competitors, or any of the more environmentally-friendly, more cost-effective refillable pods available online. Company CEO Brian Kelley and Keurig's marketing department then made matters dramatically worse when they tried to claim the ham-fisted market lockdown was "critical for performance and safety reasons."

The story got notably more amusing when "hackers" started defeating the company's DRM measures with rather low-brow hacks consisting of pieces of Scotch tape. Competitors similarly began either developing pods that quickly defeated the embedded technology, or gave away plastic clips that confused the system into accepting competitors' pods. In short, what Keurig thought was a clever way to lock down a market and make extra money, wound up making the company look like a tone-deaf, anti-competitive, mechanical dinosaur powered by over-caffeinated nitwits.

A little more than a year after the embarrassing saga began, Keurig appears to finally be beginning a not-entirely graceful about-face on the matter. After the company's stock took a notable nose dive and sales of brewers and accessories dropped 23% last quarter, Kelley claims he's now seen the error of his ways. Sort of.

Reading the actual transcript of Keurig's latest earnings call, Kelley still can't help but minimize the backlash as the concerns of a "small percentage" of "passionate" users. Meanwhile, while Keurig focuses heavily on the fact it was wrong for pulling the company's own, reusable "My K Cup" from the market, the fact Keurig tried to bulldoze its way to market domination via obnoxious, heavy-handed DRM is, as you might expect, downplayed dramatically:
"I would tell you the other thing we heard loud and clear from the consumer while very small percent of consumers, a very vocal and intense, passionate consumer who really wanted the my K-cup back, what we learned that it’s important the message and the signal that it sends, the ethos that it sends is that we want consumers to be able to brew every brand, any brand of coffee in their machine and bringing the my K-cup back allows that.

...My K-cup wasn’t going to work with a new system as the new system had to identify the pod versus a carafe, so we took the My K-cup away and quite honestly we’re wrong. We missed, we didn’t – we underestimated, it’s the easiest way to say, we underestimated the passion that consumer had for this. And when we did it, and we realized it, we’re bringing it back because it was we missed it. We shouldn’t have taken it away, we did. We are bringing it back.
So yes, while it's great to hear the company admit it was "wrong," Kelley only admits to being wrong for pulling Keurig's own reusable pod from the market, not necessarily for trying to block all competing products -- or for spending a year trying to argue that the ridiculous foray into DRM was necessary for the safety and security of Keurig's products. Meanwhile it's still apparently going to take Keurig until Christmas to re-introduce its own, refillable pod, and, contrary to media coverage, there's no clear statement here that the company's planning to back away from coffee DRM entirely. Still, it's at least a partial victory, and Keurig's sort-of-mea-culpa is the perfect way to belatedly celebrate this week's International Day Against DRM.

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  • icon
    John Fenderson (profile), 8 May 2015 @ 10:56am

    That was my reaction too

    It was good to see that people rejected their lock-in scheme hard enough that it affected their stock price, but it was disappointing that the CEO (judging by his comments) doesn't understand what people were rejecting.

    The emphasis on the "My K-cup" was one indication. The other (more important) indication was that he thought the problem was that Keurig didn't "educate" customers that they have a very wide variety of different brands of coffee available in K-cup form.

    reply to this | link to this | view in chronology ]

    • icon
      Jeremy Lyman (profile), 8 May 2015 @ 11:53am

      Re: That was my reaction too

      That and their "solution" to coffee DRM is to "license" more brands to work with their reviled system. Guys, your patent expired, there's nothing to license. Just stop putting that crap on your machines.

      Not that it much matters, Keurig is dead to me at this point. Let that be a lesson to the rest of you.

      reply to this | link to this | view in chronology ]

  • icon
    limbodog (profile), 8 May 2015 @ 11:08am

    Side note

    I know someone who works for Keurig. She says it wasn't marketing or business that wanted the DRM, it was the engineers. Because that was how they could prevent the off-brand ones from exploding and spraying you with scalding water. Keurig had no control over what alternate brands made their cups out of, and when they tested them, found that they didn't hold up to the heat and some were swelling like boiling balloons.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 8 May 2015 @ 11:25am

      Re: Side note

      So Keurig wasted a bunch of money developing DRM for "safety purposes" when they could have just spent money that they were probably already spending on lawyers to make sure the product manual writers included legalese about how Keurig doesn't vouch for the safety of non-Keurig brand cups. I'm sure the potential to lock in customers to their supplies was just a seemingly profitable side effect of this "safety feature."

      I haven't heard of any of the competitors' pods exploding when used in a Keurig machine after bypassing the DRM or heard of any lawsuits relating to the issue either. If this happened in testing, it seems like it would have happened to a bunch of consumers and gotten press about it. Heck, Keurig would have put out a bunch of press releases about any published incidents as a defense of their DRM if they were widespread.

      reply to this | link to this | view in chronology ]

    • icon
      James Burkhardt (profile), 8 May 2015 @ 11:34am

      Re: Side note

      I second the AC's commentary. Im not sure how they held on to all that much water with holes in the bottom and top and the Kuerig only moving the amount of water you called for to move through the kcup, I mean youd think people wouldn't open the keurig until water stopped coming out, but if they were holding on to that water and then exploding not during brewing but onlyin peoples faces after the brewer was opened (not entirely sure why the opening the keurig makes the pressure worse), you think we would have heard about it by now. You really think keurig would have highlighted those incidents or even the potential for those incidents in their marketing material instead of the need to determine the size of the cup.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 8 May 2015 @ 11:36am

      Re: Side note

      Sounds like the internal "story" meant to excuse the marketing idiots.

      I'm an engineer. That's not how engineers generally think.

      They're much more likely to advocate a big day-glo sticker that says "WARNING: Off-brand cups may explode and scald you!" as a temporary measure until they re-design the thing to contain the scalding spray.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 8 May 2015 @ 11:42am

      Re: Side note

      Haha! Is there a bridge for sale in there somewhere?

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 8 May 2015 @ 11:50am

      Re: Side note

      Produce proof of this allegation OR admit that you're just a Keurigsucking shill.

      reply to this | link to this | view in chronology ]

      • icon
        limbodog (profile), 8 May 2015 @ 12:28pm

        Re: Re: Side note

        How do I provide proof of having a conversation?

        And I assure you, I am not a Keurig shill, I don't own one, I think they're a complete waste of money. I don't care if you believe me, I just wanted to pass along what I was told by a person who actually works there since everything else we're reading is guesswork by people who may or may not be customers.

        If I were going to shill for any coffee maker, it'd be my AeroPress.

        reply to this | link to this | view in chronology ]

        • icon
          John Fenderson (profile), 8 May 2015 @ 12:34pm

          Re: Re: Re: Side note

          "it'd be my AeroPress"

          Me too. Easily the best coffeemaking solution I've ever used, and I'm pretty sure that I've used them all. :)

          reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 8 May 2015 @ 12:57pm

          Re: Re: Re: Side note

          Extraordinary claims require extraordinary proof. This is just such a claim.

          reply to this | link to this | view in chronology ]

          • icon
            limbodog (profile), 12 May 2015 @ 1:33pm

            Re: Re: Re: Re: Side note

            It is neither an extraordinary claim, nor have you come up with a way for me to provide proof of a conversation I had. Don't be deliberately obtuse.

            reply to this | link to this | view in chronology ]

    • icon
      John Fenderson (profile), 8 May 2015 @ 12:06pm

      Re: Side note

      "She says it wasn't marketing or business that wanted the DRM, it was the engineers"

      That sounds incredibly bizarre to me. The overwhelming majority of engineers I've worked with over the decades would have rejected that solution as being both ineffective and hostile to the customers.

      reply to this | link to this | view in chronology ]

    • identicon
      FLG8R, 8 May 2015 @ 12:44pm

      Re: Side note

      lol - check out the reviews for *any* Keurig product out there. Your 'someone' who knows insider information about the 'engineers' might want to talk to them about the basic engineering problems most of their devices (meaning different models) have coming off the line, some of which include the problem you are mentioning even if they *are* using the K-Cups. Kohl's, Amazon, Penney's, pick a site & look up the reviews or comments. I'd love to have a product like this but not with the reviews (I suggest everyone look them up before purchasing any Keurig item), not with a proprietary delivery system & definitely not at their price point. Their stock didn't just drop because of the new system. Their stock dropped because people are realizing Keurig's products are garbage & when the coffee makers give out, they aren't replacing them with Garbage 2.0. Keurig is not the company they used to be.

      reply to this | link to this | view in chronology ]

    • identicon
      JoeO, 8 May 2015 @ 12:57pm

      Re: Side note

      Are you saying the Keurig machine actually boils water in the cup, and in a sealed cup at that?

      reply to this | link to this | view in chronology ]

      • icon
        Nop (profile), 8 May 2015 @ 11:14pm

        Re: Re: Side note

        The machine pumps very hot (~90C) water at high pressure through holes punched in the pods. While I've never heard of it happening, it's not at all implausible that thin, cheap plastic pods could deform or even burst. Of course, you'd expect the company to play up such dangers for marketing purposes, even if they're rare, or even theoretical.

        reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 8 May 2015 @ 1:29pm

      Re: Side note

      ...Because that was how they could prevent the off-brand ones from exploding and spraying you with scalding water. Keurig had no control over what alternate brands made their cups out of, and when they tested them, found that they didn't hold up to the heat and some were swelling like boiling balloons...

      If that actually happened a few times to consumers I'd bet the government would step in and order a recall. Other products have been taken off the shelf before it got to that point when the manufacturer learned of an issue before anybody got hurt. This product hitting the shelf with the stated issue doesn't put Keurig in a good light, even if it didn't have DRM.

      reply to this | link to this | view in chronology ]

    • icon
      techflaws (profile), 8 May 2015 @ 10:04pm

      Re: Side note

      Sorry, but this "argument" doesn't hold much water.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 8 May 2015 @ 11:13am

    To know a manufacturer of a product is willing to attempt to lock it down in to a higher priced offering isn't my cup of coffee.

    Keurig can apologize all it wants, the actions speak louder than it's words. Here's a clue for them. Coffee brewing is not limited to their product and their product alone.

    I will buy the product I wish and brew coffee how I damn well please. All this move did was ensure I will never buy anything from Keurig.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 8 May 2015 @ 11:16am

    23% is not a small portion of passionate users.

    reply to this | link to this | view in chronology ]

    • identicon
      David, 8 May 2015 @ 11:28am

      Re:

      But they did not lose 23% of users but 23% of sales. Now if 0.2% of all users account for 23% of sales, you can bet that those are passionate.

      You try being dispassionate when you are drinking a hundred times the coffee of an average customer.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 8 May 2015 @ 11:47am

    What is this "Keurig" you speak of?

    Oh...you mean the company whose products I removed and banned at my workplace.

    You mean the company whose products I told my family and friends (and even some enemies) to avoid like the plague.

    You mean the company that I will NEVER purchase from again.

    That Keurig. Got it.

    reply to this | link to this | view in chronology ]

  • icon
    DB (profile), 8 May 2015 @ 11:57am

    I haven't seen any reports of off-brand pods exploding and scalding people.

    If that was an actual concern of the engineers, the trivial solution is to make certain that the pod containment was sufficient to avoid the problem.

    This has the smell of PR BS. And the CEO's statement sounds like "I'm sorry.. that I got caught."

    reply to this | link to this | view in chronology ]

  • icon
    Spaceman Spiff (profile), 8 May 2015 @ 11:58am

    Best sentence of the year in Tech Dirt

    In short, what Keurig thought was a clever way to lock down a market and make extra money, wound up making the company look like a tone-deaf, anti-competitive, mechanical dinosaur powered by over-caffeinated nitwits.

    reply to this | link to this | view in chronology ]

  • identicon
    Adam, 8 May 2015 @ 12:57pm

    Exploding??

    I've owned a Keurig 1.0 for quite a while now and I've probably run 5 kinds of tea (not Keurig) and 6 kinds of coffee (not Keurig) through it several times a day. Never had any of those risky foreign (not Keurig) K-cups fail in any way.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 8 May 2015 @ 1:12pm

    I resolved Keurig's problem with a Bunn My Cafe.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 8 May 2015 @ 2:11pm

    The behind the scenes runs thusly:

    Lets pretend to be sorry, and when we sell a fuckload of coffee makers, we'll try going back to the DRM shit...

    reply to this | link to this | view in chronology ]

    • icon
      John Fenderson (profile), 8 May 2015 @ 5:04pm

      Re:

      I may have missed something, but by my reading they didn't say that they're doing away with the DRM. What they said was that they are going to reduce the price of the brewers, they're going to advertise more effectively that there are over 500 kinds of licensed pods, and they're bringing back the My K-Cup.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 9 May 2015 @ 12:12am

    yadayada...We missed, we didn’t – we underestimated, it’s the easiest way to say, we underestimated the passion that consumer had for this...yadayada

    You can tell by the way he's stammering that he really wanted to say, "We counted on them being stupid."

    reply to this | link to this | view in chronology ]

  • icon
    Ed (profile), 9 May 2015 @ 8:02am

    More issues

    I have a new (less than 2 months old) Keurig 2.0 machine. I can easily bypass the DRM well enough but I've been using genuine K-cups since buying it. After brewing just 3 cups a day for a month/half, the machine stopped working, acted as if clogged somehow. Called tech support, they talked me through sticking a paper clip up into the side of the "needles" and flushing water through the machine by holding the activation button. After a couple of those flushes, the machine now works as it should. This must be such a known issue, the tech lady said she was mailing me an "official cleaning tool" to help with this process and that I should use it monthly. Maybe those design engineers shouldn't have spent so much time agonizing over imaginary exploding cups and instead made a more reliable device.

    reply to this | link to this | view in chronology ]

  • identicon
    Thrudd, 9 May 2015 @ 11:34am

    Official cleaning tool - A partially straightened paperclip with attached logo and drm tag.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 10 May 2015 @ 7:24pm

    Remember when average_joe insisted that everyone else who disagreed with him on this topic were wrong, wrong, wrong?

    Ah, delicious tears.

    reply to this | link to this | view in chronology ]

  • identicon
    Ted, 11 May 2015 @ 12:33pm

    The tech issue is BS. They have been out there trying to pitch that. What they wanted to do is lock the system and drive up their price for a very wasteful product that is creating a big issue in our landfills.

    reply to this | link to this | view in chronology ]


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