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Nespresso is the brand name of Nestlé Nespresso S.A., an operating unit of the Nestlé Group based in Lausanne, Switzerland. Nespresso machines brew espresso from coffee capsules, a type of pre-apportioned single-use container of ground coffee and flavorings.
In 1976, Éric Favre, an employee of Nestlé, invented, patented and introduced the Nespresso system to the business market in Switzerland without significant success. In 1988, due to the efforts of Jean-Paul Gaillard — a business man, the inventor of «Le Club» community —, the product became a market success. In 1990, the firm signed a contract with Turmix, which started to sell Nespresso machines in Switzerland. Thereafter, other contracts were signed with Krups, Magimix, Alessi, Philips, Siemens and De'Longhi.
The first patent application for Nespresso's process of brewing espresso from capsules containing ground coffee was filed in 1996.
The Nespresso Company manufactures both machines and the capsules they use. Nespresso machines and their capsules can be purchased in Nespresso stores, by mail-order, or many other consumer appliance stores.
Nespresso offers a number of different machines for sale. The machines carry the brand names of well known kitchen equipment manufacturers such as Krups, Magimix, Miele, Siemens, and DeLonghi, mostly they are manufactured by the Swiss company Eugster/Frismag, one of the world's largest coffee machine producers. Although based in Switzerland, Eugster/Frismag also manufactures in China under the Krups, Turmix, Delonghi and Magimix brands. Often Krups and Magimix store display models are "Made in Switzerland" (noted on the bottom of the machine)and others machines come from China. The Lattissima models are manufactured by DeLonghi. Eugster/Frismag (based in Amriswil Switzerland) is little known to the public because the company is strictly an original equipment manufacturer. In 2000, Nespresso began distributing machines bearing the "Nespresso" brand.
Nespresso capsules are sold exclusively by Nespresso and are more expensive than portions of ground coffee purchased "loose". The cost per serving is up to three times higher than that of alternative brewing methods.
Each capsule contains 5–6 grams of ground coffee and makes one cup of coffee. Depending on the length of the pour the capsule is designed for 40ml for an espresso shot, or 110ml for a lungo (long) pour. Refillable Nespresso-compatible capsules are manufactured by Dutch company Coffeeduck. They make two different refillable capsules; one for Nespresso machines made before October 2010 and one for machines made after October 2010 (after Nespresso changed the design of their machines).
Australian company PodCafe released a 'one size fits all' refillable capsule in 2012. Their refillable pod fits most Nespresso compatible machines, and also allows users to brew tea and hot chocolate.
The Dutch company Douwe Egberts (a subsidiary of Sara Lee) has launched a coffee capsule compatible with Nespresso machines in Europe and the US. Unlike the Nespresso capsules, the "L'or expressO" capsules are made out of plastic instead of aluminium, and unlike the Nespresso capsule these are not perforated in the top while inserting them in the machine but are pre-perforated, and so the capsule is not airtight. Therefore the capsules come separately packaged, each in their own airtight bag, probably filled with an inert gas. Douwe Egberts recently added new varieties of these coffees, there now are fourteen.
Just like Douwe Egberts, Caffe Vergnano, a well known Italian coffee blender, launched their own branded Èspresso compatible capsules made of plastic, individually packaged and starting with 4 varieties. It was launched in the European market, in selected countries such as Switzerland, Italy, Germany, Spain and Portugal.
A 2012 variation called NaOra was released on Spring. The 2012 Fall variation is Crealto, A blend of Indonesian and south American beans.
The 2011 Variations flavours were Vanilla Blossom, Cherry and Dark Chocolate were released on 14 November. In 2010 the Variations flavors were Vanilla, Caramel and Almond. In 2009 the Variations flavors were Crème de marrons (Chestnut Cream), Apricot and Pain d’Épice (Gingerbread).
Nespresso's hermetically sealed capsules are made of aluminium foil. When the capsule is inserted into the machine, the top of the capsule is pierced. Some machines make a single large hole, and others make a number of smaller holes. When the machine is activated it pumps in hot water under high pressure. This causes the flat bottom of the capsule to bow out, as this is made of thinner foil than the rest of the capsule. The base of the capsule holder (on which the capsule sits) has a number of raised squares which cause the foil to rupture at these points. The brewed coffee exits the capsule through these rupture holes and flows into the coffee cup. There is a pressure release valve inside the brewing chamber which prevents an explosion occurring if the coffee exhaust path becomes blocked.
The spent capsule must finally be removed from the holder; on some machines this is automated.
Social media, such as Facebook, has been used to promote the product in the form of an interactive Facebook page and celebrities, such as George Clooney and John Malkovich, have been used to market the product. The brand's current slogan is What else?. The brand Nespresso is the subject of continued promotional campaigns around the world. Promotions include bonus coffee capsules sold with the machine.
Packaged portions of espresso coffee like those from Nespresso has become one of the fastest growing segments of the coffee market, accounting for 20 to 40 percent of the value of ground coffee sales in the European coffee market which totals USD 17 billion.
In August 2010, it was reported that Nespresso sales have been growing at an average of 30 percent per year over the past 10 years and more than 20 billion capsules have been sold since 2000 at a current selling price equivalent to about USD 0.43 to USD 0.62 per capsule.
Nespresso reported annual sales of CHF 3 billion in 2011, growing by 20% during the fiscal year.
Officially, Nespresso does not allow customers to purchase coffee capsules from other sources. As a result, choice of flavours is limited and there is limited competitive downward pressure on capsule prices. Nespresso seeks to position the brand as an exclusive luxury good. The price of capsules in 2011 ranged from US$0.57 to $0.64 USD each. In March 2011, the Swiss discount supermarket, Denner, won a court battle with Nestlé over the sale of Nespresso compatible capsules. The plastic capsules are approximately half the retail price as the genuine Nespresso capsules.
The concept (machine, capsule, service) is subject to 1,700 patents which protect Nespresso's ownership of the concept until the patents expire. This contrasts with some other prepackaged coffee preparation systems. This has led to comparisons of Nespresso with printer manufacturers that tried to hinder the sale of generic ink cartridges, to achieve a Vendor lock-in effect. However, neither the machine nor the capsules can be considered generic until the patents expire.
Nespresso's patents will begin to expire in 2012, gradually allowing competitors to offer capsules and machines compatible with the Nespresso system. Nestlé is working on ways to prevent competitors from doing this.
A former CEO at Nespresso has started a rival firm, Ethical Coffee Company SA (ECC), to make compatible biodegradable capsules for the Nespresso machine.
Other competitors include a Swiss start-up, Nexpod, which offers Nespresso-compatible empty capsules which can be filled with the coffee (or tea) by the buyer, CapsuleCup from Hong Kong that provide compatible capsules in bulk and a South African company based in Cape Town which sells Nespresso-compatible capsules under the brand name Café-Caps Cafe Caps specializes in private label production.
In mid-July 2010, Sara Lee, which in France makes coffee under the "Maison de Café" brand, launched L'OR EspressO which uses a plastic capsule that fits both Sara Lee's own espresso machines and the Nespresso system. By August 2010, according to Sara Lee, more than 30 million capsules of L'Or had been sold. Nestlé has sued Sara Lee, accusing the latter of contravening its patents. In December 2010, Sara Lee announced that they would start selling their capsules in the US under the Douwe Egberts name, and since mid 2011, Sara Lee has expanded sales of its capsules into other countries, such as Spain where they are sold under the "Marcilla" brand.
Each cup of Nespresso coffee produces aluminum waste, the main material of the capsule. There is 1g of aluminum in one capsule (including the cover) compared to about 13g for a soft drink can. Recycling aluminum represents energy savings of up to 95% in comparison with the production of primary aluminum. To begin with, Nestlé did not implement recycling programs outside of a few parts of Switzerland. This led to a large per-cup waste generation, which was criticised by some user groups. Some consumers empty out used capsules and put the aluminum capsules in their recycling waste. Now, however, many more countries have recycling facilities. France and Switzerland are some of Nespresso's biggest buyers so the recycling facilities are a lot more accessible in these countries. In the UK, recycling was rolled out starting in London, Bristol and Bath and now covers all of the mainland. When fresh capsules are delivered by courier, spent ones are collected in bags provided for the purpose. Used capsules can be also taken to any Nespresso Boutique for recycling. The recycling program has also been introduced in The Netherlands, where consumers have the option to return their used capsules to a limited selection of stores or hand them over to postal services. In the USA and Australia, consumers can drop off used capsules at Nespresso boutiques for recycling.
In recent years some third-party products, such as the Outpresso device, have also emerged that ease the removal of coffee grounds from expended capsules, allowing the aluminum to then be recycled through standard municipal recycling programs.
The ecological footprint of a Nespresso coffee is more important than other steps in preparation (decoction, infusion, filtration, percolation) because of their packaging in capsules. A minority of capsules are recycled: Nestle states a current rate of 50% in Switzerland and Germany, but only 2% in France. The proportion of recycled aluminum in the capsules is not exactly known, but is estimated to be less than 30%. The company has launched a program called "écolaboration" to try to remedy the problem.
In addition to the recycling programme discussed above, Nespresso states 'ecolaboration' includes a AAA sustainability programme, focused on helping farmers who grow and supply Nespresso coffee. Nespresso claims it does this by teaching farmers best business and growing practices. The company claims participating farmers are not obliged to sell to Nespresso, although the company says many choose to as Nespresso claims to offer a fair price for the coffee and help in all aspects of the farmers' business.
Unlike the regular capsules, Nespresso Pro capsules cannot be recycled because they are made of a mixture of plastic and aluminum. Since the layers of material are sealed to each other, the Pro capsule can only be burned. This has led the World Wide Fund for Nature and other environmental agencies to state that "the most reasonable solution is still the purchase of bulk coffee".