Product Managers Prepare To Change How We Make Cocktails

A new machine is going to make it easier to make cocktails
A new machine is going to make it easier to make cocktails
Image Credit: Thomas Hawk

If you enjoy a cup of coffee in the morning when you are at home, just exactly how do you go about making that cup of coffee? These days, if you are like most people, you probably pop one of those “K-cups” into your Keurig machine and then sit back and let the magic happen. This way of making coffee has become so popular that the product managers at Keurig have started thinking about branching out. In fact, they’ve expanded their product development definition and set their eyes on cocktails as the next market that they want to enter.

How To Make A Better Cocktail

Product managers at Keurig Dr Pepper are in the process of pushing ahead with an idea to automate home bartending with a K-Cup type machine for cocktails. Their motivation for doing this is because they are seeking to tap new areas of growth as sales of their core products start to slow. Product managers at Keurig are trying to replicate the success of their namesake coffee-brewing device. Sales of the machines which are now used regularly in 22% of U.S. homes, declined in the fourth quarter. That kind of market penetration would look good on anyone’s product manager resume.

The new product that is being created, the Drinkworks machine, is being offered for preorder for $299. It works by using liquid-filled pods. It then adds water and carbonation to serve up cocktails like an Old Fashioned, a Moscow Mule, a mojito or a gin and tonic – plus three brands of beer and cider. The machine will chill drinks but won’t add ice. The pods, which contain the equivalent of a shot of alcohol plus flavorings, will sell in a pack of four for $15.99 for most cocktails. The product managers understand that they need too avoid consumption by children. To accomplish this, the pods are designed so that they can’t be opened by hand. Additionally, the company is working on developing a lock for the machine.

This is not the first time that the Keurig product managers have tried to branch out from coffee. There was a failed effort between the coffee maker’s product managers and Coca-Cola to sell single-serve machines for cold soft drinks. Back in 2016, they decided to discontinue the Keurig Kold after the home soft-drinks machine failed to catch on. The reason that this product was not a success was because many consumers balked at the price of the machine, which initially cost $369. Additionally, the pods also were expensive, costing $1.25 to make an 8-ounce drink. Finally, the machine took about 60 seconds to make a single serving. Customers quickly realized that this was much longer than it took to grab a can of soda from the fridge.

Next Steps In Entering The Cocktail Market

What the product managers at Keurig are trying to do will not be easy. Drinkworks will face some of the same challenges as the Keurig Kold did. At $4 per drink, the price is higher in many cases than mixing a cocktail by hand. Drinkworks is hoping that its target consumers – couples who have a drink at home each night and may have guests over a few times a month – will be attracted by the convenience of popping in a pod instead of measuring and mixing a cocktail. The Keurig’s coffee pods come in brands such as Starbucks and Peet’s Coffee. Drinkworks doesn’t currently offer any spirits brands. The product managers are currently in discussions to license brands.

This is a market that may soon become crowded. French spirits maker Pernod Ricard is planning to launch its own home-bartending assistant later this year. Their product will be called Opn and it will dispense spirits such as Absolut vodka and Jameson whiskey from flasks that are shaped like books in a library. Through a separate app it will offer cocktail recipes, but consumers will need to mix the drinks themselves. As of yet, pricing for the flasks and the tray they sit on hasn’t been disclosed.

The product managers hope that the Drinkworks project will allow them to push into e-commerce. About 15% or 20% of sales in the pilot for the product were made online. Selling booze online can be difficult, both because of the weight of the bottles and because U.S. regulations prohibit alcohol makers from distributing or selling their own products. The thinking is that the small, lightweight Drinkworks pods, by contrast, are well-suited for e-commerce. The product managers are working with the e-commerce startup Thirstie who is operating the Drinkworks website and working with third-party alcohol retailers to ensure that the sales comply with the law.

What All Of This Means For You

Having a successful product is what being a product manager is all about. However, there is always constant pressure on us to do more, to grow our markets, to be more successful. The product managers at Keurig, the very successful coffee machine makers, feel this pressure. They’ve looked at their product manager job description and they now plan on addressing this issue by expanding into a new market: cocktails.

The Keurig product managers plan on building on the success that they have had with their K-Cup machines. Coffee machines that use this system have proved to be very popular. Their new product will be called Drinkworks. It will use liquid filled pods and then add water and carbonation. Keurig product managers have tried to make spin off products in the past; however, they failed. There are challenges associated with offering this product. The K-Cups are expensive and there are not a lot of spirit brands currently being offered. Other competitors have seen an opportunity and appear to be preparing to enter this market. This product may allow the Keurig product managers to expand their online sales.

Any time a product manager can take a successful product and then develop a spin off product, their chances of success are very good. The Keurig product managers have identified a market that they believe that they can serve. They are going to have to be able to offer the spirits that people like to use at home and they are going to have to make sure that they can keep their prices under control. Who knows, perhaps the next time that you go over to a friend’s house they’ll offer you a coffee or a cocktail?

– Dr. Jim Anderson Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: What factor do you think is going to determine if this new product is going to be a success?

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What We’ll Be Talking About Next Time

It’s currently a tough time to be a product manager for vaping products in the U.S. right now. Vaping products exploded on the scene a while back and have become very popular. However, there have been a number of serious health-related issues that have started to show up and all of sudden people are starting to view vaping as perhaps being a dangerous thing to do. Some vaping product managers think that they may have a way out of this quandary. They have come up with a new product development definition and a new use for their product: vaping vitamins.

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