Your Refrigerator Could Soon Be a Barista

Before you go, we thought you'd like these...
Before you go close icon
Your refrigerator may soon be able to do more than just make ice cubes or keep leftovers cool. General Electric (GE) is teaming up with Keurig Green Mountain (GMCR) to put out the first fridge that also brews cups of coffee.

It won't come cheap, and it may not come easy for either company, but let's not burst the caffeinated bubble for java junkies so quickly. The fridge itself will be cool.

The high-end GE Cafe line of refrigerators raised the bar a few years ago by offering a feature on French-door models that dispenses filtered hot water as well as cold water from the front door. GE surveyed owners of those appliances -- and two-thirds expressed interest in producing hot beverages.

At that point it only made sense for GE to explore the possibilities with Keurig Green Mountain. Keurig is the undisputed champ of one-cup servings of premium warm beverages. Its K-Cup platform has hundreds of varieties of coffees, teas, hot cocoa and warm ciders available. Keurig is the only one that has distinguished itself in this niche, and folks weren't going to pay up for a luxury refrigerator backed by a fledgling beverage platform.

That Pop Was a Flop

The fridge won't hit the market until this summer -- and you might also want to start saving up. The stainless steel, French-door refrigerator with single-serve Keurig K-Cup brewing system has a suggested retail price of $3,300. Is the convenience or the ability to free up some counter space that important to consumers?

It probably doesn't help that the last beverage-making fridge that hit the market at a similar price point didn't set the world on fire. SodaStream (SODA) teamed up with Samsung two years ago to roll out the first refrigerator that uses SodaStream technology and CO2 refills to deliver carbonated water from the dispenser. The $3,900 price tag proved too steep, and even though Samsung (SSNLF) hasn't given up on the appliance, it now sells closer to $3,000 at the outlets that still stock them.

That may seem to be a bad omen for GE and Keurig Green Mountain, but let's not assume that just because one fridge making specialty beverages at a price north of $3,000 didn't fare well the same scene will play out here. Premium coffee has a higher perceived value than soda. The popularity of hot beverages is also growing. Starbucks (SBUX) -- a Keurig partner -- has posted 20 consecutive quarters of positive comparable-store sales growth. This comes at a time when soft drink sales in this country continue to decline.

It also should work in favor of the new fridge that Keurig has partnered with most of the leading coffee brands to back its Keurig platform. The same can't be said about SodaStream, which most of the top soft drink brands view as a competitor.

Then again, Keurig brewers are relatively cheap. Replacing one would probably cost less than repairing a high-tech function on an appliance door. We'll find out soon enough if the market is ready for baristas in the fridge door. Given the country's fascination with premium coffee, we can't dismiss its chances.

Motley Fool contributor Rick Munarriz owns shares of Keurig Green Mountain and SodaStream. The Motley Fool recommends Keurig Green Mountain, SodaStream and Starbucks. The Motley Fool owns shares of General Electric Company, SodaStream and Starbucks. Try any of our Foolish newsletter services free for 30 days. Want to make 2015 a winning investment year? Check out The Motley Fool's one great stock to buy for 2015 and beyond.
Read Full Story

People are Reading