After a rocky first half of 2017, Juicero, the $399 tabletop cold-press juice machine that has raised almost $120 million in funding from the likes of Google Ventures and Campbell Soup’s Acre Ventures, announced a 25 percent reduction in staff as part of a “strategic shift designed to lower costs.”
In a letter sent to employees on Friday and shared with BevNET, Juicero CEO Jeff Dunn explained that the staff reduction, which was mainly sales and marketing employees, would allow the company to shift towards “more focused investment on product development, manufacturing, shipping and improving our sourcing of organic produce.”
As part of the shakeup, co-founder and former CEO Doug Evans will be stepping back from daily operations at the company while retaining his seat on the board. Evan’s role has decreased over time. Upon Jeff Dunn’s hiring as CEO last October, Evans shifted his focus to product development, innovation, recruiting, company partnerships and investor relations.
Evans did not respond to a request for comment on this story.
According to Dunn’s letter, the moves are aimed at reducing production costs for both the 31.5 pound, Wi-Fi connected machine as well as the vacuum-sealed, proprietary organic produce packs that it uses. Both were subject to criticism following a Bloomberg report in April which demonstrated that, rather than requiring the four tons of pressure that the machine applies, juice could be extracted from the packs by hand-squeezing.
Dunn referenced the controversy in his letter, thanking staff for their professionalism and calling the story a distraction. “It was frustrating to read that something we always knew about, and that our customers simply aren’t interested in doing, was somehow new and relevant,” he wrote.
Following the controversy surrounding the packs, Juicero offered all customers the option to return their machines for a full refund. Dunn wrote to employees that less than 5 percent of customers returned their machines despite the offer.
Yet Dunn acknowledged that price remains an obstacle to mainstream consumer acceptance.
“While our sales are growing and our customers are loyal, we also all know that the current prices of $399 for the Press and $5-$7 for produce Packs are not a realistic way for us to fulfill our mission at the scale to which we aspire,” he wrote. He noted that innovative home appliances, such as Keurig and Nespresso coffee makers, started off as expensive items and the he expects Juicero “to follow a similar trajectory.”
The strategic shift puts pressure on Juicero to deliver with its second-generation machine. In January, the company announced it was dropping the price of its press from $699 to $399 ahead of schedule, as the change was originally planned to coincide with the launch of the new model in 2018.
In the letter, Dunn notes that, despite having a “strong working prototype,” the “v2 Press” is still in development and that more work is needed for the company to achieve a sustainable cost structure. Originally available exclusively in California, Arizona and Nevada, Juicero expanded coverage to include select cities in 17 states in April. In May, the startup partnered with Whole Foods Market to launch self-serve juice bars in 11 stores in Southern California.
“While I’m pleased with our progress, we’re still some time away from introducing substantially lower pricing and unveiling a national distribution strategy to achieve the scale we’re aiming for,” he wrote.