Juicero Raised $120 Million to Build a $699 Wi-Fi Juice Press That Checked Every Pack Against an Online Database Before Squeezing It. Bloomberg Reporters Squeezed the Packs by Hand and Finished First.
On 31 March 2016, a San Francisco startup called Juicero unveiled a countertop cold-press juicer priced at $699. The machine did not take fruit. It took the company's own produce packs, sealed pouches of pre-chopped organic fruit and vegetables that Fortune said "look sort of like IV bags", sold by subscription at $4 to $10 apiece. The press was connected to Wi-Fi. Each pack carried a QR code, which the machine read to confirm the contents were fresh and to order a replacement. A button was pressed, and eight ounces of juice came out.
The founder, Doug Evans, said he had raised somewhere around $120 million to do this. His investors included Google Ventures, Kleiner Perkins Caufield & Byers and, from the food industry, Campbell Soup. Evans told Fortune that the system was "orders of magnitude" better than anything on the market, and explained the engineering challenge: to create "8,000 lbs of force in a countertop unit," he said, "means that you need special metals and gears that can withstand incredible forces." Fortune's own launch coverage had to carry a correction. An earlier version had said that Apple's chief designer, Jonathan Ive, designed the machine. He had not.
The Founder
Evans had come to juice through retail rather than engineering. In 2002 he co-founded Organic Avenue, a New York chain of cold-press juice bars, sold a controlling stake about a decade later, and was pushed out by the buyer. The chain later went bankrupt. He started Juicero in 2013 and, by his own account, spent about three years building a dozen prototypes. According to two investors who spoke to Bloomberg, he had secured funding in 2014 by showing 3D-printed renderings of the product without a working prototype.
He was not modest about the result. Bloomberg reported that Evans "would compare himself with Steve Jobs in his pursuit of juicing perfection," and that he had likened his work, in an interview with Recode, to the invention of the mainstream personal computer. "There are 400 custom parts in here," he told Recode. "There's a scanner; there's a microprocessor; there's a wireless chip, wireless antenna." The press, he said, wielded four tons of force, "enough to lift two Teslas."
The Price Cut
The machine cost more to make than it sold for. According to a later Bloomberg account, each press initially cost Juicero $750 to manufacture, before rent and salaries. In October 2016 the board replaced Evans as chief executive with Jeff Dunn, a former president of Coca-Cola, and Evans became chairman. A few months later, after limited sales, the retail price came down to $399. Packs now sold for $5 to $8, and only to owners of the machine.
The Squeeze
On 19 April 2017, Bloomberg reporters Ellen Huet and Olivia Zaleski published the results of a test. They put a Juicero pack in the machine, took another and squeezed it by hand, and timed both. The reporters wrung 7.5 ounces of juice out of a pack in a minute and a half. The machine produced 8 ounces in about two minutes. The device, Bloomberg concluded, was "slightly more thorough." The hands were faster.
Two investors told Bloomberg they had been surprised to discover this after the product shipped. One said their firm would not have met with Evans if he had been "hawking bags of juice that didn't require high-priced hardware." Four people said Juicero had not broadly disclosed to investors or employees that the packs could be squeezed by hand. Workers at seven businesses that owned the machine all said they had not known either. Investor Doug Chertok had worked it out on his own. "There is no doubt the packs can be squeezed without the machine," he said. "I'm still a huge fan."
Juicero declined to comment. A person close to the company explained that the press offered something hands could not: it read the QR code on each pack and checked it against an online database to ensure the contents had not expired or been recalled. Bloomberg noted that the expiration date was also printed on the pack.
The Refund
Within days, Dunn published a post on Medium. "The value of Juicero is more than a glass of cold-pressed juice. Much more," he wrote. He cited the machine's "closed loop food safety system that allows us to remotely disable Produce Packs if there is, for example, a spinach recall," and described hand-squeezing as "a mediocre (and maybe very messy) experience that you won't want to repeat once, let alone every day." He then offered every owner a refund for 30 days: "if you send us your Press, we'll refund the money you paid for it. Period." According to Bloomberg, fewer than 5 percent of owners took him up on it.
On 24 April 2017, Ben Einstein, a founder of the hardware venture firm Bolt, published a teardown of the press. He ranked it in the top 5 percent on the complexity scale of the hundreds of consumer products he had taken apart. He found eight large machined aluminium parts, which he guessed accounted for over 50 percent of the bill of materials, hardened-steel spur gears "rarely seen in high-volume consumer electronic products", a custom high-voltage power supply, and a door lock built from a solenoid, a motor and controller board, ten custom injection-moulded parts and assorted pins, springs and bushings. "All this just to keep the door closed," he wrote. Most of the complexity, he concluded, came from one design choice: pressing about 64 square inches of pack at once, which required thousands of pounds of force. A human hand, as the Bloomberg video showed, simply squeezes one part at a time.
The Wind-Down
The money followed the hands. Bloomberg later reported that Juicero had been negotiating about $55 million in new funding, including from a syndicate organised by the venture arm of UBS China, which had been four months into due diligence when word spread that the pouches could be squeezed by hand. The would-be investors left. By May most of Juicero's sources of capital had drifted away. In July, Dunn announced plans to cut 25 percent of a 210-person staff. The company was losing about $4 million a month, and its board-level investors offered more money only if that fell to $1 million. Juicero's executives concluded that a company spending $1 million a month would be paralysed. The board voted on 23 August to wind down operations.
Evans was not at the final board meeting on 31 August. He had resigned from the board the week before and was at Burning Man. On 1 September 2017, the Friday before Labor Day weekend, Juicero announced that it was immediately suspending sales of the press and the packs, that it would look for a buyer "with an existing national fresh food supply chain", and that customers could have a refund for the next 90 days. A few days later Evans posted a photograph of the empty desert on Instagram, captioned "Peace at Burning Man. #vegan #raw #juice."
Bloomberg's sources gave the board's reason for the refunds. The machines, they said, had become useless once the company stopped shipping its proprietary juice packs. The press had been built to check every pack against the company's database before squeezing it, and the company had closed. The last packs in circulation could still be squeezed by hand.
Filed from public reporting:
- Fortune — "This Man Just Raised $120 Million for a Fancy Home Juicer"
- Fortune — "A $699 Juice Press Just Raised $70 Million"
- Bloomberg (via The Jakarta Post) — "Silicon Valley's $400 juicer may be feeling the squeeze"
- Fortune — "You Can Now Squeeze a Refund Out of Juicero's Bag-Pressing Machine"
- Bolt — "Here's Why Juicero's Press is So Expensive"
- The Guardian — "Squeezed out: widely mocked startup Juicero is shutting down"
- Bloomberg (via The Santa Fe New Mexican) — "Juicero's demise from prized startup to fire sale"
