10/12/2021, 08:01 Nespresso’s competitive environment – Nespresso Boutique Flon

Nespresso Boutique Flon

Nespresso, What else?

Nespresso’s competitive environment

More than 30 years ago, Nespresso invented the capsule system that we know
nowadays for coffee extraction. Being the pioneers of the capsule industry, Nespresso
had a long-standing monopoly on the market, which allowed them to put a signific-
ant margin on their products. However, as soon as their patent has expired, many
brands have tried to conquer the market with similar products or even capsules
compatible with Nespresso machines.

Over the years, Nespresso has adopted several strategies to combat competition:

1- Innovation: by continuously innovating, Nespresso tries to beat its competitors.

Over the years, the company will have released more than 1 600 patents worldwide.

2- The attack of the competitors: By developing its machines with minimal changes,
Nespresso tries to «trap» the other capsules producers when inserting these capsules
into a Nespresso machine. In addition, the company continues to sue the manufac-
turers for “intellectual property” pods despite the fact that they end up losing their
case after a few years.

3- Their image: The brand tries to prove that it remains the top-of-the-line in coffee,
by highlighting «George Clooney» or «Anton, Alexis and Angélique» (3 coffee experts)
in their marketing. They are associated with luxurious environments such as star
restaurants (in 2013, they occupied 25% of French gourmet restaurants).

https://cupcaketeam75.wordpress.com/2019/04/15/nespressos-competitive-environment/ 1/5
10/12/2021, 08:01 Nespresso’s competitive environment – Nespresso Boutique Flon

Machine developed by Nespresso

Following qualitative secondary researches, we were able to create this table, high-
lighting several important competitors of Nespresso and therefore of their boutique
in Flon.

If the table concentrates more on brands selling coffee capsules (or pods), it is be-
cause the sale of capsules represents 90% of Nespresso’s total sales.

However we also included Starbucks as an important competitor of Nespresso be-

cause in the United States, Nespresso is far from having the same fame as in Europe.
It is no coincidence that Nespresso’s first “elaborate recipes” were the “latte macchi-
ato” and “cappuccino” that are Starbucks’ best sellers. It was also to conquer the
American market that we saw the arrival of their «Vertuo» capsules, designed to cre-
ate «longer» coffees.

https://cupcaketeam75.wordpress.com/2019/04/15/nespressos-competitive-environment/ 2/5
10/12/2021, 08:01 Nespresso’s competitive environment – Nespresso Boutique Flon

Nespresso’s different concurrents

Since 2012, Nespresso started to lose its patents and in consequence a part of its glob-
al share on the capsule and pads share due to less protection. Here are the data of
the “Wall Street Journal” from 2015:

https://cupcaketeam75.wordpress.com/2019/04/15/nespressos-competitive-environment/ 3/5
10/12/2021, 08:01 Nespresso’s competitive environment – Nespresso Boutique Flon

Coffee Market Share

In conclusion, we note that many brands have managed to sell capsules compatible
with the Nespresso system and that Nespresso no longer holds the monopoly. How-
ever, while many sell similar products, there are still important differences. Ne-
spresso remains the most luxurious coffee brand on the market.

It remains the only one to offer:

– Extremely personalized sales service to their customers;

– Stores mixing the “store”, “restaurant” and even “event” aspect;

– And in addition to those, a wide variety of capsules and machines for sale only on
their platform or in their shops to guarantee direct contact with their customers and
to meet their high-end image. We may wonder how long Nespresso will still be able
to keep a large market share? How will they continue to innovate? And finally, will
they manage to penetrate the American market?

Sources

Web journal “Le Capital”, Sylvain Lapoix, 26/05/2015, retrieved from

https://www.capital.fr/

Unknown author, 24.05.2016, retrieved from https://www.romandie.com/

Official Starbucks Website in Switzerland, uknown date, retrieved from

http://fr.starbucks.ch/

https://cupcaketeam75.wordpress.com/2019/04/15/nespressos-competitive-environment/ 4/5
10/12/2021, 08:01 Nespresso’s competitive environment – Nespresso Boutique Flon

Official L’Or Espresso Website, unknown date, retrieved from

https://www.lorespresso.com/

Illy official website, unknown date – retrieved from: https://www.illycafe.ch/f

Dolce-gusto official website, unknown date – retrieved from: https://www.dolce-

gusto.ch/

Acquaspresso official website, unknown date – retrieved

from: https://www.aquaspresso.co.

“Le Temps”, Adria Burdy Carbo, 18.05.17, retrieved from https://letemps.ch/economie

Dolce guesto official website, unknown date, retrieved from:

https://wearedolcegusto.wordpress.com

“Le Bilan”, Marjorie Thery, 13.07.18, retrieved from https://www.bilan.ch/

Café Royal official website, unknown date, retrieved from https://www.cafe-

royal.com/

Official Tassimo Website, unknown date, retrieved from https://www.tassimo.com/

 15. Apr 2019  blogmarketing1819b75

Create a free website or blog at WordPress.com.

https://cupcaketeam75.wordpress.com/2019/04/15/nespressos-competitive-environment/ 5/5