Ethical Coffee Company, the David that challenges Goliath Nespresso is getting 21 help!
by Chee Leng
Just some background for those that are not aware of this battle. Nespresso for the longest time operates a closed system, this means if you buy their machine, you need to buy their capsules.
Along came this Ethical Coffee Company, that make a capsule that is 25% cheaper than Nespresso and is compatible with it. Sales soared.
At the time of this writing, it is being sold in Casino (a French retailer) in over 600 outlets. Sales by the way should be good -ethical coffee company has a base of Nespresso 7 million machines.
Then, some time back, Nespresso decided to take some legal action to stop ECC, it seems that it is going to be lengthy and costly legal battle.
Now, you have 21 partners an equity firm that is pumping money in ECC. While their fanacial status would still not be as strong as Nespresso, at least it is being beef up for the fight.
If ECC would to win the fight, Nespresso would lose a very lucrative business. For a few years, Nespresso has been the growth engine of Nestle, now that might change.
And I guess ECC should know how Nespresso would play the game, the found and CEO of ECC Jean-Paul Gaillard was former ly the head of Nespresso!
Anyway, hope ECC stay the course and all of us would have cheaper capsules for our nespresso machines!!:)
Oh by the way, 21 partners is a company and it is not 21 different parnters. IT is an internatial financial group and a major private equity player.