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Growing consumer demand drives Nespresso ahead

 
Richard Girardot, CEO Nestlé Nespresso SA

Richard Girardot, CEO of Nestlé Nespresso SA, explains how Nespresso continued to perform strongly in 2011 and what 2012 looks like.

 

How did Nespresso perform in 2011?

Nespresso performed very strongly in an increasingly dynamic and competitive portioned coffee segment. Despite tough economic times, we have seen that consumers seeking daily indulgence have continued to choose Nespresso.

Beyond the numbers, I am pleased that we continue as the growth engine in the portioned coffee segment. We again showed that we are more than just another coffee company. Coffee is what we do, but consumer pleasure is why we do it. I believe that’s why consumers continue to choose us. This is a testament to the quality of our product and to the trust that we have built with consumers over the years.

 

How do you explain this continued success?

Our continued focus on quality, innovation and personalised service drove our strong performance. It has positioned us as the preferred choice and reference for our consumers. Continuous innovation is part of our company culture. We want to be better than even the best-in-class and that’s the mission of our 7 000 employees around the world.

We were successful in driving innovation in our machines and coffees, and in offering new personalised services to our Club Members in an increasing number of markets. One example is the Boutique Pick-Up where consumers can place an order online or by phone and then pick it up an hour later in their preferred boutique. Consumer response has been excellent.

When it comes to machine innovations, PIXIE was our most successful machine launch ever. Its sales performance in the first year outstripped that of CitiZ in the same timeframe. And Lattissima+, a one-touch coffee-and-milk solution that we launched last autumn, has a huge potential, as 60% of all coffees worldwide are consumed with milk.

 

Are you observing any consumer patterns that are having an impact on the business?

Quality has always been a key driver for us. What we have observed is that consumers are becoming more discerning in their purchases. They are increasingly embracing brands and quality they trust. This is something we have consistently delivered on and I think we are seeing that in consumer purchasing decisions. More broadly, in the current economic environment, consumers are increasingly turning towards in-home entertainment options and affordable indulgence. This is something where we are ideally suited to play a part.

 

How do you see the evolution of your professional offering?

B2B Nespresso machine - Aguila
B2B Nespresso machine Aguila

The business-to-business sector offers us huge growth opportunities that we’ll continue to develop. Consumer habits around the world are evolving. Consumers are increasingly appreciating, selecting and demanding superior quality coffees both at home and out of home. Last year, we made a step change in our B2B strategy. In addition to our superb Grand Cru coffees for B2B customers, we introduced innovations in both our B2B machine range and the services that we provide to our business customers.

 

The newest B2B machines – Aguila for the HORECA sector and Zenius for companies – are equipped with the most advanced technology available to date. They contain a feature that will let them communicate directly with our Customer Relationship Centres. The feature enables us to provide value-added service to our B2B customers by addressing maintenance and services needs in a timely, proactive way. With this feature, our business partners can focus on what really matters: serving their customers and running their business.

 

What is the growth strategy for Nespresso in 2012?

Consumer awareness continues to drive growth of the portioned coffee category. To take advantage of this, we need to continue to build on the points that differentiate us: quality, innovation and design, and the services of the Nespresso Club. We’ll pursue our drive for continuous innovation across all areas of our business. And our teams will continue to enhance the personalised services of the Nespresso Club, which sets us apart in the market. 
 

We will also continue to innovate in our machine offerings. We have already announced the launch of our first machine range this year, consisting of Maestria and Gran Maestria. They are the Nespresso flagships in the popular fully automatic coffee machine segment.

Finally, we will continue to focus on growing the opportunities to engage directly with our Club Members by delivering increasingly tailored services. We will also continue to pursue select geographic expansion. 

 

What are your expansion plans?

We are currently present in over 50 countries worldwide, with over 270 boutiques. We have been smart about our growth. We are selective in our approach: when we choose to expand, we do it in a way that preserves the essence of the Nespresso brand. There is significant room for growth in our developed markets in Europe.

There is also enormous untapped potential in developing markets, so we’ll continue to accelerate outside Europe. In 2011, sales originated outside Europe grew two-fold since 2009. This number will continue to grow as we move forward. This year, we’ll open 40 new boutiques in both established and new markets. We are particularly excited about our new flagship boutique in London, which is set to open this summer. I believe that we are ideally positioned to seize upon consumer trends and to continue to set the tone and shape the global coffee culture.