A Single Serve Game Changer!

Jul 4, 2012

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As sure as eggs are eggs and Brazilian Minas is Minas… there will come a time, I am pretty sure, when the burgeoning single serve espresso and filter sector will be private label dominated

One could argue that, at least in the UK, the same did not happen with Douwe Egberts Senseo filter system… This market remained over whelming loyal to the branded operator pads… whereas, our cousins in Continental Europe, welcomed the cheaper mass produced private label versions and copies with open arms

The interesting question is what will happen with Nespresso – now that patents are expiring and a small army of copy capsule manufacturers and sub brands are appearing what will happen next?

Well, I suppose an inevitability is that the ‘also ran’s’ of the branded capsule war will be the first casualties…Why buy the dreadfully boring Kraft Tassimo , morkish Lavazza  Modo Mio and unheard of Tchibo Cafissimo when you can buy a far superior offering which offers branded and private label flexibility?

The US market is now providing an interesting case study for the future which is just around the corner for the UK and EU market place

Green Mountain Coffee Roasters Inc… A market leader in the US single serve sector with, until now, patent protected K-cups (admittedly- this isn’t pressure pumped Nespresso espresso equivalent – but none the less the principle of coffee in a capsule remains a constant)… has recently had to reduce retail pricing by 1.1%

Not earth shattering figures, nope…..But, when you hear that their share price has fallen 56% this year and dropped 8% to c. $19 on the back of this seemingly insignificant detail, then you start to realise that the analysts foresee Green Mountain, a premium priced product, will now have to keep pricing down, if it is to compete with the growing private label threat….it’s a game changer!

US retail data shows Green Mountain currently able charge a $2.50 pack premium vs PL offerings … which trade at $5.43…

The pride and price which comes before a fall is going to be costly!

Expect a thrills and spills rerun here in the UK!

Guru ( Andy Grelak) writes for Aromo Coffee – They are coffee experts focussed on providing convenient and tasty ways for the caffeine addict to take their medicine. Aromo supplies excellent ESE Coffee pods and superlative Senseo pods,  both of which offer the espresso and filter connoisseur  a no mess, no fuss,  super fresh and environmentally conscious method to make stunning coffee… the guys at Aromo also have a range of Dualit branded capsules which make a brilliant and economic alternative to nespresso capsules