Coming soon -the future of coffee.
by chee Leng (on coffee makers)
Dolce Gusto From Nestle
If you are a coffee drinker, would you be interested to know what type of coffee you would likely be drinking?
Instant coffee is still the most drank solution, espresso is still the gourmet choice, but there is an in between that is growing by leaps and bounds.
Single serve coffee maker.
With strong marketing by Nespresso, hype-up strategy by Tassimo, and foray into this niche by Starbucks, this is no longer a new thing or a hype -it is likely to be the future of coffee.
Instant coffee is too flat, no dimensions and of course to many coffee snobs, it is simply not coffee.
Espresso on the other hand is too complicated and sophisticated for many coffee drinkers. Most of them cannot even differentiate between a Mocha and a latte!
The rest of coffee making solution such as drip, vaccuum, perk are passe, and is not likely to make a come back. Single serve coffee
has a comprehensive package. It is easy to use, easy to maintain and clean, the coffee is consistent, it is all pre-measured to ensure optimum brew.
The technology within the capsules or pods when interact with the coffee machine ensures a good cup of coffee. Some machines can even brew cappuccino with a real froth!
The cost per serve is only slighly more than instant coffee, much cheaper than a coffee of the day at any cafe.
It has everything that your usual coffee drinker want for a coffee. Ease of use, tasty and cheap coffee.
The growth is phenomenal and it would grow even more. According to Euromonitor, in canada, coffee pods grew by 8000 over %!
It grew by 800% to 500 over million dollars.Despite the growth, it is only 10% of the 8 billion US coffee market. Can you imagine the growth.
It is no wonder all the big names in the industry are in it! Starbucks is on it, Nestle has been doing it for years, Sara Lee, Lavazza, Cuisinart, Bunn they all have a single serve solution.
currently can be demarcated into three main players -Keurig
and the rest. Keurig
Keurig has a strong presence in US, and with its partnership with Starbucks, it is poised for global domination -the question is which area to start first.
They should have no issue protecting their stronghold in US and moreover, because they are sort of your "open source" solution and would work with most coffee partners -I see their growth as being faster.
Consumers is also more likely to choose them as their brewer, because of the range of products and drinks that they carry.
The only roadblock to their growth is Nespresso. Nespresso
The pioneer in this industry, they have been doing coffee pods since 1980's and has grown to over 13 million machines and with an annual sales of 26.9 coffee capsules per year.
Their growth is also their curse. Because of the huge market for their capsules, there are companies serving out Nespresso compatible solutions.
The three most noteworthy ones are ECC, Sara Lee and NExpod, and if the lawsuit against them failed -Nespresso stand to lose a huge chunk of their business.
They have restricted their only growth by focusing on being a closed system and not working with any partners. In the long run, their growth would be slower because consumer want a machine that can make any drinks.
And their capsules sales would run lower because of more and more compatible capsules coming online.
The rest of the single serve coffee makers, in my opinion would not grow in terms of size that would match either Keurig or Nespresso.
This is mainly because the two hot areas that would own coffee machines are being occupied by them.
Asia is the next battle ground, but the coffee culture us mostly out of home and it takes time to grow the market. In addition, Nespresso already has a strong presence here.
Regardless who is the market leader, given the push and the innovation in this segment -Single serve is and would be the future of coffee.