I got in the post today a magazine from Nespresso, and it got me thinking about what an amazing brand growth story this is: heading for 1 billion Euros in sales.
This subsidiary of Nestle launched just over 20 years ago, in 1986. It sells coffee in beautiful little capsules. An equally beautiful machine then uses these to produce what I have to say is a damn fine espresso or latte. In recent years growth has really taken off, with sales up 42% in 2006 to reach 727 million Euros.
It seems to me that Nespresso is a new generation of brand, that combines product "sausage", emotional sizzle and also service. Here's a few thoughts on what they have done:
1. Amazing design: check out those capsules. They're so damn pretty, its almost a shame to use the things. And the machines are perfect for today's design conscious kitchen.
2. Super premium: when you work out the cost per serving its really scary, especially if you make a double espresso. You're talking 0.4 Euros a capsule, versus, a c. 400% premium vs. using a jar of Nescafe
3. Super sausage: the coffee is very good. The Nespresso speciality is the "cremosa" topping you get on the espresso. They also have a huge range of different blends, each with its own colour of capsule.
4. Direct to the consumer: this is a biggie. Nespresso is one of the few brands who markets direct to the consumer. You order your refills by phone or internet. And this has some major advantages:
- More margin: you are seller and retailer
- No trade negotiations: want to launch a new product? Just list it. Contrast that with the other 99.9% of FMCG brands who have to negotiate the minefield of negotiation with the major retailers.
- Data is king: Nespresso know all their customers. Just think of the value of the data base of affluent customers alone... back in 2004 they already had 1,6 million active Nespresso Club members!
5. Brand palaces of desire: Nespresso pioneered the brand store, long before Apple opened up their first Apple store. It now has more than 30 "boutiques". The latest, the Paris flagship at 119 Champs Elysees is an amazing place, that I must visit next time I am in Paris. Here are some of the features described on the website of this 2-story brand palace:
- The Barista Bar: the heart of the Boutique. The Barista, an uncontestable expert, plays the star and creates succulent coffee recipes while inviting everybody to the coffee ceremony.
- The Machine Gallery. Presented here are the symbolic creations of the brand, the coffee machines: Le Cube, Essenza, Lattissima… displayed like jewels.
- The Gallery of Senses. A very special area – almost like being in a life-size capsule, dedicated to the perfect espresso. Monumental decor with olfactory columns where temporary exhibitions will take place.
- The Lounge, calm and refined, an isle of softness. Ideal for a light snack or to simply relax in a cozy chair, with a cup of Volluto or a Ristretto in hand, all in a contemporary electro-jazzy atmosphere.
- The Collection Gallery. The collection of accessories and Limited Edition or Special Club series are displayed with sophistication.
- The Grands Crus Gallery. The sleeves of Grands Crus display their personality proudly on the walls.
- The Concierge. An exceptional service which attends to customers’ individual needs.