What Happened To Juicero? Here’s Why It Failed

Executive Summary:

Juicero is the company behind the Juicero Press, a Wi-Fi-enabled kitchen appliance that presses juice out of pre-packaged pouches.

Juicero failed due to an unattractive pricing model, an over-engineered product, bad press, as well as turmoil within the company.

What Is Juicero?

Juicero is the company behind the Juicero Press, a Wi-Fi-enabled kitchen appliance that presses juice out of pre-packaged pouches.

With traditional juice makers, users have to prepare the fruits by chopping them into singular pieces. Furthermore, significant portions of the fruit or vegetable may be lost in the process.

Juicero aimed to greatly simplify that process. To make a glass of juice, one would simply insert a pack into the machine, close the door, and press the start button.

The fruits and vegetables were processed within days of harvest to maximize freshness while being sourced from local farmers in the United States. Juicero offered a variety of flavors such as pineapple, romaine, celery, cucumber, spinach, and more.

Each of the packs would come with its own QR code. A camera within the machine would then scan the code (using a Wi-Fi connection) to assess the freshness of a pack. If it wasn’t considered fresh anymore, Juicero would not press it.

Users could, furthermore, personalize their juice drinking schedule within the Juicero app to adjust package deliveries. The app would also let users know about the nutritional value of the juice they just consumed.

The Juicero machine initially sold for $699 but was later heavily discounted. Meanwhile, new pouches could be ordered by opting into a monthly subscription which would cost another $5 to $8.

Juicero ultimately shut down less than two years after its launch all while having burned through almost $120 million in funding. Who was behind the company, how it came to be, as well as the reasons for its failure will be covered in the next few chapters.

What Happened To Juicero?

Juicero, formerly headquartered in San Francisco, California, was founded in 2013 by seasoned entrepreneur Doug Evans.

Back in the 1980s, the young Evans trained as an army paratrooper but eventually left the military to become a graphic designer.

In the early 1990s, he even opened up his own design shop which he ran for close to 13 years. His love for juices was ignited in 1999 when he met Denise Mari, a devoted vegan, at a party in New York. Within two weeks, Evan completely change up his diet and became vegan himself.

Not only did the two end up in a romantic relationship but their mutual love for a vegan diet also led them to start Organic Avenue, which sold $10 juice bottles and other vegan food, in 2002. Four years later, they finally managed to open their first store in New York.

Over time, the pair managed to grow from a single store to owning a chain of outlets. Celebrities like Gwyneth Paltrow would publicly come out and rave about the quality of their products.

However, due to the notoriously expensive real estate prices in New York, Organic Avenue’s margins were always razor slim. In 2012, Evans and Mari, who were separated at that point, decided to sell a majority stake to a private equity firm Weld North which ousted Evans not long after. Organic Avenue eventually filed for Chapter 7 in 2015 and reopened a year later.

The ousted Evans was already on to bigger and better things. After selling the company, he began facing a simple problem: how would he get a proper juice now that he isn’t at a shop almost every day?

He went on to buy almost every available juicer there was only to realize that none of them matched his criteria. This led him on a path to recreate a miniature version of the industrial presses they were using at Organic Avenue.

To get a prototype of the ground, he hired various freelance designers and welders and built prototypes in his Brooklyn kitchen. Occasionally, some of his prototypes would blow up, which led to scraps of food and pieces of metal flying across his apartment.

Luckily, by 2013, he managed to create a first functioning prototype. In order to sustain himself, he convinced his former partner Denise Mari as well as previous Organic Avenue backers to back him with $4 million in cash.

A few months later, a mutual contact introduced Evans to Amol Deshpande, a partner at the renowned venture capital firm Kleiner Perkins who became an instant believer. This eventually led to an investment of $16.5 million in April 2014.

The investment allowed Evans to move Juicero’s headquarters to Silicon Valley and hire multiple renowned employees. For example, he was able to convince Malachy Moynihan, who had previously spearheaded the development of the Amazon Echo/Dot, to join Juicero as its Chief Product Officer. Allegedly, Juicero had even hired legendary Apple designer Jony Ive to consult for the company.

Unfortunately, the money was still not enough due to the vast complexity of the product. Evans, being the charming entrepreneur that he is, managed to convince investors yet again. A selection of 14 backers, led by Artis Ventures, poured another $70 million into Juicero in 2015.

Finally, after around three years of product development, the Juicero Press was launched on April 1st, 2016. Around the same time, the company managed to raise an additional $28 million in venture capital.

While the juicer received tons of press, most of the reviews were more focused on its steep price of almost $700. Evans himself did his best to build up hype and when interviewed going as far as saying that they had “built a piece of hardware that is one part iPhone and one part Tesla.”

Throughout the coming months, the team tried to get the product into as many hands as possible. In October, to the surprise of many, Juicero announced that co-founder Evans had stepped down as CEO and became chairman of the board. He was replaced by Jeff Dunn, a former president of Coca-Cola North America.

Dunn’s strategy was to significantly drop prices (down to $399) for the juice machine in order to boost sales and get people invested in the ecosystem (i.e., purchasing pouches on a monthly basis). Juicero also expanded from only selling to Californian residents to opening production and distribution facilities in Arizona and Nevada (since customers needed to be in close distance to those facilities to preserve freshness).

Unfortunately, the bad news kept on piling on. In January 2017, Kristina Simmons, Juicero’s former Head of Marketing, stepped down from her role. However, the worst was yet to come.

On April 19th, 2017, Bloomberg released an article in which two of its journalists showed that you could simply squeeze the juice out of the pouches using your bare hands. Not only that, but the juice would also come out much faster than when using a machine and would basically yield the same amount.

That angered many of its customers who began to wonder why they would need to churn out $699 (or $399 later on) to essentially get the same amount of quality of juice.

The article also revealed that the firm’s investors were similarly angered. Evans allegedly failed to disclose that the pouches could be squeezed. Furthermore, they also were dissatisfied with the machine itself as it ended up being much bulkier than initially promised.

Lastly, the article also caused potential investors to back out of a deal that Evans was negotiating in the background.

While all of this drama was unfolding, Juicero announced that it had expanded from three to 17 states. The team was also commencing work on a second and much cheaper version of the juice press which they planned to launch in 2018.

In order to extend its runway, Juicero, in July 2017, announced that it would lay off 25 percent of its workforce. Unfortunately, the lay-offs were not enough to save the already drowning ship that was Juicero.

On September 1st, 2017, the company announced that it would immediately suspend the sale of the Juicero Press and its associated produce packs. To the firm’s credit, it offered full refunds of the Juicero Press for the next 90 days.

In the meantime, co-founder Evans had already quietly removed himself from the company’s board the week before. Just four days after Juicero’s shutdown, he posted a picture of himself attending the Burning Man festival, which was all the confirmation his critics needed.

Dunn and the board tried to find a potential acquirer to salvage what was left of the company. Unfortunately, they did not manage to find anyone willing to purchase those assets and ultimately shut down the company altogether.

Co-founder Doug Evans also quickly moved on from his failure. He ended up starting a few more organic businesses, for instance selling people $40 jugs of “raw water” and even released a book on sprout farming.

Why Did Juicero Fail?

Juicero failed due to an unattractive pricing model, an over-engineered product, bad press, as well as turmoil within the company.

The company entered the market at a price point of $699 while charging fairly hefty recurring subscription fees.

The business model was inspired by the likes of Keurig and Nespresso which had been able to build up recurring revenue streams by charging customers for their coffee tabs (alongside the machine).

However, both the coffee machines as well as the tabs were (and are still) sold at much lower price points. The margins are ultimately made by selling the tabs, which are way less costly to produce.

Naturally, the high entrance price vastly diminished the targetable audience. Critics would soon begin to joke that the Juicero Press was a product made for by and for Silicon Valley elites.

The bad press and consistent public mocking, probably best exemplified by the above-mentioned Bloomberg piece, further added to the company’s poor image.

Furthermore, despite the hefty price point, it allegedly cost Juicero $750 to produce one juice maker (not even taking into account operational expenses such as rent and employee salaries).

This was because the product itself was heavily over-engineered. The machine contained more than 400 custom parts including scanners, microprocessors, and more. As a result, Juicero was losing money on every sale, which greatly diminished its runway (and thus required the team to consistently raise money).

While getting hardware products off the ground is, in fact, often a costly undergoing, Juicero could have tried to enter the market by offering a cheaper and simpler product. This would’ve allowed the company to test its assumptions before going full steam ahead.

On top of that, Juicero also wanted to own the whole value chain by controlling the harvest and distribution. This not only meant that it had to invest in costly facilities but greatly slowed down possible expansions. It, therefore, came as no surprise that the company only managed to expand into a total of 17 states by the time it folded.

Lastly, former company employees also reported that the founder was a great salesman but a very poor operator. One day he would push the teams to focus on expanding its Nort America business, the next day he said that they needed to go after celebrity influencers who would promote the product.

Evans was therefore quickly replaced as CEO by Jeffrey Dunn, who all things considered, was a much better operator and did manage to steer the ship at least to a certain extent.

In the end, Juicero managed to blow through almost $120 million in venture capital. To this date, its demise serves as one of the greatest examples of how even the most experienced entrepreneurs and investors can just be totally wrong.

Hi folks, Viktor checking in! Years of experience in various tech-related roles have led me to start this blog, which I hope provides you with as much enjoyment to read as I have writing the content.