Keurig Caves a Little in Coffee Kerfuffle

On the first Saturday in May, this column was about “copyrighted coffee.” In a nutshell — or, in this case, coffee bean: The new Keurig 2.0 coffee maker was designed so only Keurig-licensed coffee pods (K-cups) would work in the machine.

In other words, users could no longer buy reusable pods and fill them with their own coffee. Nor could they use pods that were from a coffee company that did not pay Keurig’s licensing fee. Nor would old Keurig K-cups work in the new Keurig 2.0.

Customers were not happy. Keurig defended its new brewing system from a convenience and safety standpoint. Customers grew even angrier.

Now for the news: Several days after the column ran, Keurig reported its most-recent financials. Wall Street was not happy. During that Wall Street earnings call, the company also backed off its “copyright” efforts — just a tad.

The Keurig 2.0, capable of brewing a single cup or a carafe, came out just before Labor Day last year and was supposed to be a big holiday shopping favorite.

It failed, leading to an unimpressive earnings quarter. Keurig president and CEO Brian Kelley was quick to throw the 2.0 under the bus, saying, “Our top-line growth … was below our expectations primarily due to the slower-than-expected transition to the Keurig 2.0 system.”

Since November, Keurig Green Mountain Inc.’s stock price dropped from $152 down to $86 a share at the end of May — more than 40 percent.

“Some of this was due to consumer confusion around pod compatibility, which we’ve mentioned in the past,” said Kelley about Keurig’s failure to meet Wall Street expectations.

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