With a turnover of 727 million euros in 2006, Nestlé Nespresso SA is one of the Nestlé Group’s most profitable brands. Richard Girardot, former Chairman and Managing Director of Nestlé Waters France, has just been appointed world Chairman of Nespresso.
Nespresso occupies a prime position in the booming upmarket capsule coffee market. The brand has no intention of resting on its laurels, however, and aims to double its turnover by 2010.
Nespresso occupies a privileged position in Western Europe and is particularly well positioned in France. “Our aim is to become a reference in the capsule coffee market”, explains Roberto Eggs, international sales manager and Chairman of Nespresso’s French subsidiary. To achieve this, Nespresso intends to redefine the way coffee is drunk at home, as well as in offices, restaurants and cafés.
Perfect espresso at home
A pioneer on the capsule coffee market, Nespresso has succeeding in remaining at the top. Indeed, Nespresso occupies a leading position on the household market since Nespresso France has a market share of more than 40% on the espresso market.
In recent years, the Cube and Essenza machines have proved a resounding success with householders and companies alike. The secret of these machines? They are attractive to look at and easy to use.
Between 1997 and 2006, sales of espresso machines rose from 1 to 3.5 million and the company has a 25% share of the world market in this sector. Sales of machines have increased spectacularly since 2001.
In a break with tradition, Nespresso has come up with new designs and more attractive colours. “The world of espresso machines was dull. Nespresso has given it life,” explains Jean-Paul Le Roux, managing director of Nespresso’s French subsidiary, adding that “customers don’t want to be bored whilst they’re sipping their coffee. On the contrary. They want to live this intense sensory experience to the full.”
In homes and hotels
In 2006, from its privileged position on the household and office market, Nespresso decided to enter the HORECA (hotel, restaurant and café) market. It had no desire to compete with the heavy-duty percolators offered by the big names, however. Instead, the brand targeted clients needing a machine that was simple for their staff and even their clients to use, and they concentrated on the quality of the coffee.
For these professional clients, Nespresso developed machines that made other coffee-based drinks as well as espresso, such as cappuccino and macchiato. “The Gemini machine has already been adopted by several well-established hotels including the Meurice and the Crillon and Baccara jewellery shops,” says Jean-Paul Le Roux. In both the household and professional markets, Nespresso hopes to make its mark in a world that subscribes to its values.
Members of the club
When they buy a Nespresso machine, customers automatically become members of the Nespresso club. “Getting together over a cup of coffee means sharing a sensory experience. That’s what we want to offer our clients who make no secret of their attachment to the brand. In fact half of all new clients come to us through personal recommendation,” observes Roberto Eggs.
Today, Nespresso can pride itself on a total of 3.1 million customers. “Our objective is not limited to the acquisition of new clients. We hope to maintain a relationship of trust with loyal members,” says Roberto Eggs.
Nestlé Nespresso SA creates this unique relationship by avoiding placing intermediaries between the brand and its clients. No question of selling machines to its clients without supplying them with clear instructions on how they work. More than just products, Nespresso offers a complete service. Nestlé Nespresso SA has chosen to position itself in a distribution network that meets its requirement of personalised customer service.
Far from the supermarkets, Nespresso machines are to be found within specialist distribution networks (household equipment shops and coffee stores), upmarket distribution companies and Nespresso boutiques (120 worldwide planned for the end of 2007), the most prestigious of which will open its doors in Paris on the Champs-Elysées in mid-December 2007. Like Vuitton bags and Cartier watches, Nespresso espresso machines, promoted by luxury brand ambassadors such as cinema star George Clooney, have acquired the status of luxury objects.
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