The Failure Awards for defunct branding | #4 Juicero
Juicero was set up in 2013 by Doug Evans, the raw food evangelist who had previously helped Denise Mari establish Organic Avenue, a chain of juice bars selling cold-press concoctions in glass jars.
In 2013 70% of Organic Avenue was sold to investment firm Weld North. Doug Evans was then squeezed out. Organic Avenue subsequently folded.
As Doug Evans explained “..when we started Organic Avenue in 2002 we were the only cold-pressed, organic bottled juice company in the United States. And by 2012 there were hundreds of companies.
"And it became commoditised. There was very little barrier to entry. Anyone could buy a juicer, squeeze some juice, put it in a bottle.”
Doug Evans continued to pursue his passion for pressing turning his attention to the personal juicer.
In an interview with technology website Recode, Evans compared his pursuit of juicing perfection to Steve Jobs’ work on a mainstream personal computer.
"I'm going to do what Steve did. I'm going to take the mainframe computer and create a personal computer, I'm going to take a mainframe juice press and I'm going to create a personal juice press,"
And so the iMac of juicers was born. As one reviewer pointed out: “It also sort of looks like ET’s head when he's wearing that sheet.”
Doug Evans proudly pointed out that his juice press wields four tons of force as he said it had the power to lift two Teslas. "There are 400 custom parts in here. There’s a scanner; there’s a microprocessor; there’s a wireless chip and wireless antenna.”
The Juicero Press works with Juicero Produce Packs, single-purpose pods full of crushed fruit and veg supplied by the company on subscription.
Extracting US$120 million
Impressively, Juicero extracted around US$120 million from investors including some Silicon Valley giants such as Kleiner Perkins Caufield & Byers and Alphabet Inc.
The subscription model has always proved to be a sweet spot for venture capitalists.
VCs were no doubt encouraged by the success of businesses such as Nespresso which couple one-time sale of hardware with repeat sales of consumables.
David Krane, a partner at GV formerly Google Ventures, pointed out it is one of the most complicated businesses he has ever funded. “It’s software. It’s consumer electronics. It’s produce and packaging."
Owning the value chain
Owning, controlling or at least understanding the value chain is certainly something which I would advocate and a model I follow. A smorgasbord of services provides added value to customers; not just for convenience and cross fertilisation, but also by enabling a deep understanding of their businesses and brands.
By controlling the value chain it is possible for businesses to offer some products or services at reduced rates in order to secure revenue streams via other products and services. Many companies, for example, have found success by giving away the hardware and making money on the software.
VCs bought Juicero’s vision. The Juicero Press was launched in March 2016 with an eye watering price tag of $699. The pouches of chopped fruits and vegetables were sold exclusively by the company by subscription. Each week customers would be shipped a bundle of five produce packs starting at US$29.99 per weekly five-pack bundle.
Juicero was dubbed "Keurig for juice”.
Fortune magazine pointed out it really does seem to be as simple as that revolutionary single-serve coffee system. “After setting up a weekly ingredients subscription through the Juicero app, users wait for their first "packs" of chopped up mixtures of organic produce to arrive. Users place a pack in the Wi-Fi connected machine, press a button, and an 8oz. glass of juice pours out.”
Dunn and dusted
In October 2016 Jeff Dunn, former president of Coca Cola North America, took over from Doug Evans as chief executive. In January 2017 the price of the Juicero Press was dropped to US$399.
Value vs price
Defending the cost, Dunn pointed out: "the value is in how easy it is for a frazzled dad to do something good for himself while getting the kids ready for school, without having to prep ingredients and clean a juicer. It's in how the busy professional who needs more greens in her life gets app reminders to press produce packs before they expire, so she doesn't waste the hard-earned money she spent on them."
Taking the pips
In spite of changes in pricing, Juicero was widely ridiculed.
Tom Goodwin wrote: "This is everything wrong about Silicon Valley in one note. A sort of unique sense of out of touch that makes people who ship chopped vegetables at 4000% mark-up think they are changing the world because of a nice looking app. And then they feel appalled that real people don't see it that way."
CNET called it a product "built to squeeze your wallet dry".
To make matters worse, in April 2017 Bloomberg ran a story accompanied by a video demonstrating that Juicero’s pouches could be squeezed by hand without the need to use Juicero’s high-tech machine.
— Bloomberg Technology (@technology) April 19, 2017
Fighting back, Dunn maintained that the "hacking" of the pouches did not produce the same quality of juice as the machine was calibrated to deal with different ingredients differently.
He went on to point out that the machines had other advantages: "The value of Juicero is more than a glass of cold-pressed juice. Much more." As each pouch of fruit and veg had a QR code that must be scanned and verified by the internet-connected machine before it could be used, the firm could disable them remotely: "..if there is, for example, a spinach recall. In these scenarios, we're able to protect our consumers in real-time."
It is also possible to ensure that customers do not make juice with pouches that had expired. Although many argue that this is not really a problem as the pouches have expiration dates written on them.
Critics remain unconvinced, pointing out that the Juicero is effectively a solution to something which is just not a problem.
In addition to the viability of the product, distribution is also a challenge. As the pouches have limited shelf life with perishable contents they can not be shipped long distances. Distribution has therefore been limited to only a few US States.
In spite of focusing its resources on lowering the price of the Press and Produce Packs and a valiant PR fightback, Juicero announced on 1 September 2017: "After selling over a million Produce Packs, we must let you know that we are suspending the sale of the Juicero Press and Produce Packs immediately.”
They pointed out that “it became clear that creating an effective manufacturing and distribution system for a nationwide customer base requires infrastructure that we cannot achieve on our own as a standalone business".
And went on: "We are confident that to truly have the long-term impact we want to make, we need to focus on finding an acquirer with an existing national fresh food supply chain who can carry forward the Juicero mission.”
For the next 90 days the company is offering refunds for your purchase of the Juicero Press.
To its many critics Juicero is an over engineered, overpriced solution to a problem that just did not really exist. The squeeze on Juicero meant that it has ran out of juice.
For these reasons Juicero is this week’s nominee for the Octopus TV Failure Awards.
Join me next week for more fantastically fabulous failures.
Until then …. toodle pip.
From failed products and services to campaigns and ads we would rather forget, we want to encourage organisations and brands to be better at learning from failures not just ignoring them and pretending they never happened.
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