The global market for single-serve coffee capsules is enormous, estimated at €9 billion this year alone--with more growth on the way.No wonder Nestle's Nespresso, which practically invented the industry, is about to feel even more of a competitive squeeze.
The company is known for its stylish boutiques (see left, a view of its Copenhagen store) and full range of feature-rich espresso and coffee machines.
Customers can buy from Nespresso's stores or order online for home or office delivery, an added convenience reflecting brand loyalty.
In recent years, Nespresso has faced a growing mountain of competition from companies that are making replacement coffee pods designed to fit Nespresso machines. Although Nestle has taken some of these rivals to court, it has lost its legal battles in Germany and in the UK, so far.
This week, Mondelez (formerly Kraft Foods), announced plans to introduce its own version of single-serve coffee pods to fit Nespresso machines. The Mondelez executive heading up the product introduction says: 'We'll see very strong growth coming out of this particular launch'.
For his part, Nespresso's CEO has a positive attitude about the market it dominated for many years. He says: 'Competition is an innovation driver for us' as his company continues to use quality as a key point of differentiation.
