Keurig is banking on the celebrity power of James Corden to jolt to its single-serve coffee sales amid a cooldown in the once-hot K-cup category.
In a new campaign by Havas New York, the late-night comic urges people to ditch their drip-coffee addiction in favor of the marketer's new "K-Select" coffee maker. The effort, which will be supported on TV and digital, is called "Brew the Love," and comes as the all-important holiday shopping season nears.
Corden has proven to be a popular endorser of late. Last year Chase began teaming up with the "Late Late Show" host in a campaign for the Sapphire Reserve credit card. And like all late-night talk show hosts, Corden has done his fair share of brand integrations, including with McDonald's, Coke and Heineken.
Keurig won't say if its deal includes in-show plugs, but that seems likely, judging by the way a top executive answered a question about it. "That is certainly a possibility in the future," says Scott Moffitt, chief brand and beverage officer at Keurig Green Mountain.
Havas worked closely on the ad with Corden's Fulwell 73 production team, which co-produces the "Late Late Show" on CBS. Havas sold Keurig on the idea of using Corden and sought to leverage his comedic strengths, says Jason Peterson, the agency's chairman and chief creative officer. "I want James Corden who does the funny little skits and the awesome little videos," he says. "I didn't want James Corden in a bad TV commercial."
But even with the popular TV personality on board, Keurig might have a tough time converting drip coffee loyalists. Household penetration of single-cup brewing machines grew from 9% in 2011 to 28% last year, according to data from the National Coffee Association cited by Rabobank. But growth appears to have plateaued. In 2015, the penetration was 25%, which was actually down from the 29% rate in 2014. Drip coffee makers are still found in 50% of households, according to the report.
Rabobank cited "brand saturation" as a reason for the cool-down, "as practically all mainstream brands in America are now available in [the K-Cup] platform." Sales volume growth of K-cup pods slowed to 3% in the first half of 2017, compared with the mid-teens growth in 2015-2016, according to a report by Susquehanna Financial Group, which blamed "minimal machine innovation" and "quality questions."
Americans "still seem to be pretty much in love with their drip coffee makers," says Beverage-Digest Editor Duane Stanford. "While there is an opportunity here to close the gap, they have to work harder to get people to separate from their drip coffee machines."
Keuring is also trying to overcome some stumbles in recent years. Last year the marketer discontinued a much-hyped cold beverage machine amid slow demand. In 2014, it introduced a new 2.0 line of brewers and made them incompatible with K-cups sold by other companies. The move backfired, angering some consumers, and Keurig later reversed the decision.
Moffitt, who joined Keurig late last year from Nintendo, says that while there has been "a tremendous amount of innovation" in the coffee category, "we as a company have not been leading that innovation and we need to get back to that."
The new K-Select brewer, unveiled in early September, allows users to adjust the strength of each cup with the touch of a button. It retails for a suggested price of $129.99. In June, Keurig began selling a smaller, cheaper machine called K-Compact that is only available at Walmart. The privately-held company does not disclose sales. Moffit says trends "have been extremely strong" since K-Compact launched.