Keurig 2.0 Is Leaving a Bitter Taste in a Lot of Mouths

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The new brewer from Keurig Green Mountain (GMCR), which revolutionized the way folks drink coffee at home and at the office, is shaping up to be a bit of a dud.

Keurig 2.0 uses label-scanning technology to optimize the brewing experience for each individual K-Cup portion pack. It is also the first in the Keurig family to makes pots of coffee through the new K-Carafe portion packs. Now if only it could turn up the temperature on lukewarm reviews and make nice with competitors.

Frustration 2.0

Early adopters aren't happy. The flagship K550 brewer has received a pitiful average of 2.1 out of 5 stars through its first 152 customer reviews on (AMZN) -- with 96 reviews giving just one star.

Buyers generally hate the restrictive scanning technology. It may optimize licensed K-Cups, but it won't work at all unless the K-Cup is a newer "Keurig Brewed" portion pack. It rejects older Keurig K-Cups as well as all third-party portion packs. And don't even think about using one of those reusable coffee filters that are popular with original Keurig users who prefer to use their own ground coffee.

Keurig Green Mountain went for the change to protect its market. The original K-Cup was copyright-protected until late 2012, when two key patents expired. That led Keurig Green Mountain to introduce Keurig Vue, a new platform that uses a different portion pack. It has failed to gain serious traction, largely because of the limited selection of coffees in the Vue pack configuration. Keurig 2.0 was supposed to remedy the Vue's shortcoming by accepting the K-Cups that also work with the original Keurig brewers that exist in tens of millions of homes, offices, hotel rooms and Subway sandwich shops.

A few third-party distributors are also contesting the legality of Keurig 2.0. Rogers Family Co. filed an injunction against Keurig Green Mountain last month, alleging that the Keurig 2.0 scanning process is unfairly suppressing the competition. A federal judge chose not to block Keurig Green Mountain from selling the new brewer. Canada's Club Coffee joined the party last week, making a similar legal argument in suing Keurig Green Mountain for a whopping $600 million in damages.

Motley Fool contributor Rick Munarriz owns shares of Keurig Green Mountain. The Motley Fool recommends and Keurig Green Mountain. The Motley Fool owns shares of Try any of our Foolish newsletter services free for 30 days. Check out our free report on the Apple Watch to learn where the real money is to be made for early investors.
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