Technology is not only the new processor hyper-thin tablet or the potential offered by the imagination a 3D printer. It is also the aroma of freshly brewed coffee in the morning, work a masterpiece of engineering as the Nespresso Nestle, one of the first to market with the premium coffee capsules and creator of a business model that today attracts machine brands more massive as Phillips and Cabrales, international Mondelez and Argentine spirit of Che Caffe.
This is no small thing. In markets such as Europe, Nestle has really made a difference in your business. Not only are owners of 30% of the marketshare in the segment of premium coffee in capsules but sales have reached € 4,000 million in the last four years, according to a report by Euromonitor. Today that business unit means 8% of total company profits, a not insignificant number. It has been easy so far: a commercial strategy based on the intellectual property of the capsules has managed to keep away from the market other companies that helped develop.
Two news meant bad news in this regard for the Swiss giant. First, the decision of the European patent office -the regulator of intellectual property in the old continent to revoke the patent system coffees in capsules, which meant a blow to its business model with respect to competition : now you can not do much to prevent others from producing capsules entering their machines. Second, the decision of another big food industry, Mondelez, entering the market with a product that fits perfect in the gears of the nespresso compatible tea capsules machine and it costs half.
Although not the first company that you are encouraged to Nestle itself is the first heavyweight to do so. It is, after all, a company whose flagship is Kraft and, therefore, with enough to overshadow him in marketing and shelf space in supermarkets capital. It also has under its corporate umbrella two brands associated with good coffee as Jabos and Carte Noire, under which aims to sell its new product, this time less premium and more massive.
Although still far from the local market launch of the capsules in three key markets such as France, Germany and Switzerland it is no coincidence: these are the countries where most Nespresso machines have been sold.As would any technology specialist: if you have the hardware is easier to place compatible software.
In these lands other companies, like Philips, decided to go their own way. With a cobranding with coffee Cabrales created the Senseo coffee that does not use plastic capsules but similar to tea for a frothy coffee bags. Although sales pales before the giant Nestle forced, perhaps, to accelerate the time the launch of Nescafé Dolce Gusto, a cheaper machine with pods cheaper online, these other readily available in supermarkets friends.
Is the slogan of this business unit, more massive? As Valeria Pardal, Marketing Manager of Coffee and Nescafe Dolce Gusto, “Nespresso and Dolce Gusto says are two different concepts for different consumption occasions that complement each other: one is the experience of black coffee and the other is the possibility of having the coffee shop at home and prepare multiple drinks. ” The chococino or latte macchiato, among the richest.
Continue attacking the Premium segment
But if the market gets crowded, if they come to compete new players trying to break the -low brand, by theway- 180 per year for Argentine coffees, Nespresso’s strategy is to focus increasingly to that segment premium who does not mind investing $ 7 to $ 10 per capsule to get perfect coffee, such as cafeteria, George Clooney who tasted the style of traveling first class on commercial brand.
“Our business model provides a competitive advantage and sustainable growth because we are in the market daily luxury, a segment that in the case of coffee in capsules and home machines, has demonstrated growth year after year says Romina Fontana, Marketing Manager Nespresso Austral within what is the “new luxury” Nespresso revolutionized the market is a line of global trend in Argentina, where greater access to consumer luxury goods and sophisticated observed, represents a taste accessible”.
It makes sense, then, that the style of -Elite sales Premium- remains: to take capsules must go to a special boutique , as they have in Unicenter, in Recoleta or local brand of Alto Palermo, a real experience who fascinates the beans taste quality- or become a member of the Nespresso Club to buy online or by phone.
What makes a brand by selling directly to the customer, without intermediaries? Basically, controlling product quality and service. The first depends strict quality control system: from the company admit that before reaching hands of the consumer the product passes through 17 controls. In addition, the service side, the gourmet coffee experience in the boutiques , with recommendations as options, attend lectures and tips well payments- professionals try to build an emotional connection with consumers where luxury has much to do . Translation: it is unlikely that consumers will find a Nespresso competing with other brands in supermarkets in the neighborhood in the short term. It’s his way of telling Mondelez “I continued participating.”
The other resource not to lose a significant market share is on the machines, real pieces of engineering that also are aesthetically pleasing. The latest release in Argentina was the line Master machines.
So if even its natural market gives back, choosing cheaper or geographically accessible, Nespresso obviously he still has options other spaces where growth has not reached the European figures. The US, for its size, but also the Asian and Latin American.
“In Argentina coffee is a cult drink coffee consume -74% according to data from GFK but only in recent years the culture and the habit of consuming quality products developed. Today we are eager to acquire knowledge in the field and gourmet discover the aromas of different coffees. the consumer, when informed, increasingly demands “.
Who is who
invented the concept of “coffee pods” attracting a premium segment that seeks daily luxury. He patented the system and sells exclusive capsule machines – “true objects of decoration , ” say- departing between $ 2,000 and $ 4,000. The many varieties of coffee makes it one of the best options when it comes to taste, as in tea, different blends. The cost is a bit prohibitive , but that is exactly what they want.
Nescafé Dolce Gusto
The most massive Nestle brand. He arrived in the country in 2010, and its affordable price (cost less than $ 1,000 different models) became the go-to-machine of the aspirational middle class: 41,000 machines were sold. The differential is in the range: a combination of capsules can give tastes like Latte Macchiato or chococino. Starbucks at home for $ 60 16 capsules.
In each country Phillips looking for a business partner to provide coffee for Senseo machine and Argentina chose Cabrales. But they do not sell capsules sachets, such as tea, offering four varieties of coffee. They are significantly cheaper and can be bought up in a Chinese local commerce: 16 bags out around $ 40.
100% Argentine venture, sell Italian coffee in capsules, sachets and grains. Point, such as Nestle, two segments, one more massive with your machine and another premium Gimoka with Bialetti machines that accepts the three modes of coffee. The two go less than $ 2,000 and capsules, very convenient, less than $ 5.
For the corporate segment
Two ultraconocidas brands in the port city Illy and Lavazza are. Not many menus of the day that do not offer as an option to dessert and for something: its quality is indisputable and its presence is announced in the doors of cafes and restos. But for now does not point to home consumption but of restaurants and offices: although Lavazza has a store in downtown, selling is mainly by distributors and wholesale.