Masses not hungry for smart kitchens
The June Intelligent Oven is a computer-based appliance that bills itself as the world’s only smart convection oven. The San Francisco company’s base models start at $1,495 and are said to cook chocolate-chip cookies and salmon filets perfectly. Gizmodo called the June “a rich person’s toaster oven that also happens to be the smartest thing in your home.”
June released a software update and new dehydrator add-on this month. But there’s a twist: As of press time, the company had no ovens to actually sell and couldn’t say when the next batch would be ready.
As more and more smart devices invade the kitchen, more and more of these appliances are proving to be short-lived. In other words, your own connected kitchen is probably still years, if not decades, away.
It is now possible to buy — though not necessarily to receive — ovens that will sense the food you place inside them and cook it to order, scales that tell your phone how many calories are in your smoothie and induction burners that sense the temperature of what you’re cooking. The Instant Pot, a countertop pressure cooker with a million and one purported uses, continues to be this decade’s micro-
wave, dominating cookbook best-seller lists and Amazon sales rankings. Some Instant Pot models, you may not be surprised to learn, talk to your phone as well.
And yet, as the past six months have also demonstrated, the world is not ready for the Juicero, a $700 machine that custom-squeezed juice packs; the Teforia, a $1,500 machine that custom-brewed tea; or the Pantelligent, a $200 pan that told your phone whether you should turn your burner up or down. All three companies shut down over the fall.
The SomaBar, a device that makes cocktails, has pivoted its target audience from aspiring home mixologists to the hotel and restaurant industry.
According to Joe Derochowski, home industry analyst for market-research firm NPD, sales of home kitchen appliances are up 5 percent over last year. “This industry is in a huge growth phase, and the best it’s been in since the 1970s,” he said. NPD credits this spike to Millennials getting married and buying homes, just as Baby Boomers are retiring.
Companies introducing smart kitchen devices, then, have picked a great time to launch. And yet, with the exception of the Instant Pot, it’s too early to see the mass market embrace them.
“With the smart home industry in general, the graveyard’s pretty huge at this point,” said Michael Wolf, organizer of the Smart Kitchen Summit and publisher of the Spoon podcast.
The highest-profile failure to date has been Juicero, which received north of $100 million in venture capital to develop a tabletop device that would squeeze packets of chopped fruits and vegetables to order and notify users’ phones if the packet was expired. Like many of these new companies, every major funding round was covered by the tech press.
The company flamed out spectacularly this fall after an April 2017 Bloomberg story demonstrated the packs could be squeezed by hand, which led to widespread pillorizing. Investors lost faith, and the company folded soon after.
As a startup, creating a new appliance, says Eric Norman, founder of Cinder — think George Foreman Grill meets induction circulator, cooking foods to an extremely precise temperature — involves more than mad tinkering in a garage. Not only do many parts need to be manufactured, the machines that make those parts need to be tooled. Add to that software development, staff salaries and marketing expenses, not to mention the cost of innumerable delays.
Founders of smart-kitchen startups say that they are more nimble than established, deep-pocketed appliance companies, and more willing to take risks. Many are courting Silicon Valley money and are subsequently covered by the tech press, leading to early and eager hype — followed by early and eager snark if they stumble.
“Inventing excuses to make something smart is eventually going to lead to failure, no matter what,” Wolf said.
Kickstarter only accelerates the buzz/fail cycle. Many such startups are using the crowdfunding platform to raise funds from potential early adopters to manufacture a device and attract media attention. Yet campaigns may produce as much grumbling as they do excitement.
The first version of the Cinder, for instance (disclosure: I bought one), took more than a year to make it to customers. A second round of crowdfunding-based sales raised almost $550,000 in June 2017 — and those orders have not shipped yet.
According to Mike Wallace, co-founder of Perfect Company, which makes smart kitchen scales, “Kickstarter has made this harder, because companies have had a successful Kickstarter (campaign) but have not known how to mass-market a product.”
He added, “It has made retail more cynical and customers more cynical.”
“If you look at companies that are having successes,”
Wolf said, “they’re the ones who found a consumer problem that would be otherwise difficult to solve without their product.”
Wallace stressed another factor: “I think price is everything in retail.”
There’s no point in buying a smart refrigerator, oven or juice machine if you can’t afford a smartphone. Many people don’t buy new appliances until a life change or until their old device fails.
A smart device under $150 can be an impulse buy. Over $500 and it requires serious commitment, particularly for devices like the Teforia and Juicero, which charged even more for necessary accessories, such as their Keurig-like packs — attractive to VC firms looking for revenue streams, but perilous to consumers.
The Instant Pot succeeded because it added a few extra functions to an electric pressure cooker, removing many North Americans’ fears over exploding pots, which date to faulty 20th century products. The Instant Pot, which now offers versions for less than $50, also created and fostered a user community through social media.
Other smart-appliance companies that have had some success include PicoBrew, which manufactures compact machines that make small batches of beer and sells PicoPak kits for users to replicate famous craft brews. PicoBrew did a few things right, founder Bill Mitchell said.
Namely, the former Microsoft executive didn’t need to raise funds until the first product was launched. While the company charged $2,000 for its introductory model, half of sales went to craft breweries who bought it to test pilot batches, adding to its street cred. The latest model, the PicoBrew C ($549), was spurred by a Kickstarter campaign that appeared just as the product was ready to ship in May 2017 and raised almost $2 million. Cheaper models are on the way. “We’re going to get to $199 before you know it,” Mitchell said.
Another success has been the Perfect Company, which produces a series of scales connected to smartphone apps that measure recipes for drinks and baked goods by weight. It was founded by designers of electronic toys, such as the Paper Jamz guitar and Power Glove game controller. Their established relationships with funders and factories in Asia allowed the company to quickly introduce its first product through the Brookstone catalog, priced at $79.
The Portland, Ore., company has recipe designers as well as software engineers on staff to develop recipes, but co-founder Wallace said it also has support staff to handle questions from customers who like the idea of a smart appliance but aren’t yet comfortable using their phones.
NPD analyst Derochowski projects that sales of smart, connected appliances will swell in another five to 10 years, after prices come down and more tech-adjusted generations stock their kitchens.
In the meantime, startups need to figure out how to market their smart appliances — or whether they should even be producing them at all.
“Whatever technology we buy, it has to have an ‘er’ to it,” Derochowski said. “It isn’t just replacing some behavior or other product. It has to be better, faster, cheaper, healthier, safer.”