How Will Nespresso Continue to Evolve?

Saved this for a read over afternoon coffee that's not from Nespresso. It's an 'Ethiopia Refisa' from Nylon Coffee. Ed Cummings wrote about Nestlé's money-making brand Nespresso, its inventors, people who improved upon the original 1986 design and how it took off after 1990, and pondered if it is done and dusted. Titled 'How Nespresso's coffee revolution got ground down', the article was published in The Guardian on 14 July 2020.

Nespresso's marketing has been top class when it comes to ads and coffee pods. I can't stop giggling each time I see George Clooney advertising for Nespresso. The brand's ultra-practical machines are small and space-saving, and most importantly, easy to clean. Even in Seattle (home to Starbucks) and anywhere in WA, I'd rather see a Nespresso in the hotel room than a Starbucks coffee maker. Hahaha. But the US remains indifferent to Nespresso. Starbucks reigns.

Thirty years after its first successes, Nespresso has scale, experience and buying power that no other premium coffee company can match. But increasingly it finds itself threatened from below by its rivals’ cheaper capsules, and from above by fussier coffee enthusiasts. The more scrutiny Nespresso has attracted, the tighter it has drawn the curtains. It no longer releases figures about its sales or revenues, with its results buried in the overall Nestlé reports. James Hoffman, the author of the World Atlas of Coffee, describes Nespresso as “a black box of a company”.

Nespresso also faces mounting criticism over the environmental impact of its pods. (It does not release any figures for how many of its aluminium capsules end up dumped in landfill, rather than recycled.) Talk to people in the industry, and you get the sense that Nespresso’s golden age has passed. “In the major markets, Nespresso’s getting close to saturation point, and there’s lots of competition,” says Jean-Paul Gaillard, Nespresso’s former CEO. “The good years are over.”

My childhood and teenage years saw three coffee-makers sitting side-by-side at the grandparents' home — a standard Krups, a traditional local style coffee sock over a tall pot, and a Nespresso. While I will make the effort to grind beans and do a French press pot of coffee, I'm not a coffee snob. I have a Nespresso machine at home too. It's a super convenient machine.

After testing out third-party-compatible coffee pods and powder and realizing the packaging isn't great, and the coffee isn't better, I've given up and returned to Nespresso's fold of exciting coffee pods. For some reason, Nespresso's coffee pods taste better than its sister brands under Nestlé or anything instant by Nescafé. But yes, the guilt is seeping in over the used aluminum pods, even as I dutifully return them to the store's recycling program. 

2013 saw a better time for Nespresso, for it to get over its expired patent rights over coffee capsules, as well as taking a hard look at its ethical policies and the use of child labor in the coffee plantations it has licensed to produce its coffee. It is now producing responsibly-farmed coffee. A new CEO for Nestlé Nespresso S.A, Guillaume Le Cunff came on board in January 2020. He was previously President of Nespresso USA, and is outspoken about his agenda on company's sustainability. As it is with each CEO, a new legacy will be built. How will this current CEO lead Nespresso to stay abreast of its competitors?

Like other high-street businesses, Nespresso has been buffeted by months of coronavirus closure. In its late-00s incarnation, when most of its pods were sold by mailorder or on the internet, Nespresso would have been less affected by coronavirus. (“When I was there we had the highest percentage [profit] margin in Nestlé,” Gaillard told me. “But Nespresso did a ‘reverse-Amazon’. They had an Amazon and turned into a bricks and mortar business.”)  Nearly half a century after it was conceived, Nespresso finds itself in an uncomfortable new world. Consumers who might have once craved its polished, urbane chic now look for dirty-fingered artisanal blends to use with their pour-overs and Aeropress machines. A Nespresso machine on the kitchen counter used to prove your membership of a convenience-loving global consumer coffee elite. Increasingly it suggests that you are not a serious coffee person, and that your attitude to the future of the planet is suspiciously relaxed.