FDBusiness.com

The Global Coffee Capsules Market

 Breaking News
  • HKScan Strengthens its Meals Offering With Investment in Estonia HKScan, the leading Nordic food company, plans to invest in its Rakvere unit in Estonia. The €8 million investment will go towards modernising the unit’s frying department, including the expansion of the building and the installation of new cooking and packaging lines enabling implementation of new technologies and packaging solutions. Construction is to commence in [...]...
  • Food and Drink is at the Heart of the UK’s Largest Packaging Show Packaging Innovations, Empack and Label&Print returns to Birmingham’s NEC on 28 February-1 March 2018, and is set to be the most innovative show to date. With over 290 exhibitors already signed up, the UK’s largest annual event for the entire packaging supply chain will feature the latest industry innovations and technologies, alongside a major free-to-attend [...]...
  • AGRO Merchants Group Acquires Grocontinental AGRO Merchants Group, a global leader in cold storage and logistics solutions, announced today the acquisition of UK-based Grocontinental Limited. This transaction reinforces AGRO’s position as the leading cold storage and logistics provider in the United Kingdom and Ireland, deepens its commodity expertise, and substantially enhances its value-added service offerings for customers. David Grocott and Linda Grocott, third generation owners of [...]...
  • Trade Fair and More – The Event and Congress Programme For Anuga FoodTec 2018 Resource efficiency will be the primary focus of Anuga FoodTec 2018, the leading international supplier fair for the food and beverage industry, which will be held in Cologne, Germany from 20 to 23 March 2018. Around 1,700 suppliers from more than 50 countries will be presenting their new products for the production and packing of [...]...
  • TINE to Invest €77 Million in New Jarlsberg Plant in Ireland TINE, Norway’s largest farmer-owned dairy co-operative, is to invest €77 million in a dairy with the capacity to produce 20,000 tonnes of Jarlsberg cheese a year. The goal is to secure and strengthen Jarlsberg sales outside of Norway as export supports are phased out in 2020. This will make export of Jarlsberg from Norway unprofitable. “Jarlsberg [...]...

The Global Coffee Capsules Market

The Global Coffee Capsules Market
September 19
09:18 2016

A new report from industry consultants, AMI Consulting in cooperation with Plastic Technologies Inc., published in August 2016, is an authoritative comprehensive deep-dive analysis of the global Single Serve Beverage Capsules industry (aka coffee capsules).

No longer a niche market, the capsules industry has developed into a complex value chain over the years. Back in mid to late 1990s, the segment was a classic market example of an oligopoly, only limited to the pioneers of this segment: Nestlé (with Nespresso) and Keurig Green Mountain (with K-Cups). At that time, there were also a couple of Italy-centred systems for traditional espresso brewing (e.g. Lavazza Espresso Point).

AMITimeLineSeptember2016Relatively recently (2000s), as the capsules format became more popularised, brands such as Dolce Gusto (by Nestlé), Tassimo (by Kraft, now Jacobs Douwe Egberts) and A Modo Mio (by Lavazza) found their successful, high margin niches on the market.

The year 2012 marked the beginning of a dramatic market transformation, driven by the change of legal circumstances. The expiry of Nespresso and Keurig design patents in 2012 brought about disruptive changes in the supply chain, creating new opportunities for both end-users and converters to tap into this growing market segment. Albeit with some legal battles, these circumstances triggered the development of Nespresso-compatible brands and own label products that could now rely on the Nespresso machines instalment base, but offer a more competitive retail price for the capsules. Barriers to enter the capsules segment became lower (both from filling and moulding perspective).

AMI2September2016On the other hand, the supply chain of capsules is rapidly losing its oligopolistic nature and the former dominance of major suppliers has been challenged as the market is expanding. A more fragmented supply chain affects the overall profit pool and the way consumers make their choices.Needless to say, that transformation had an adverse effect on the premium image of the segment: the average price was lowered and the quality of some capsules available on the market poorer (based on OTR and performance in brewing machines). The potential machine malfunction (or misuse) in correlation with compatibles introduced some operational challenges for Nestlé and its machine partners to do with machine servicing (i.e. increased service costs).

AMI Consulting estimates that all plastic compatible capsules (across all systems) account for 22% of the Single Serve Beverage Capsules market worldwide by unit volume. The Nespresso system is world’s biggest selling system with volume of ca.17 billion units – that includes both Aluminium capsules and plastic Nespresso compatibles.

Interestingly, the North American market has not experienced an influx of Keurig imitations post-2012 to the extent comparable to Nespresso’s fate.

The development of new compatible offering is now in favour of the Nescafé Dolce Gusto system (another brand of Nestlé). The market penetration of Dolce Gusto compatibles is still low at the moment, but it is expected to grow strongly in the coming years.

About Author

mike

mike

Related Articles



Food & Drink Business Conference & Exhibition 2016

Upcoming Events

  • January 8, 2018RAI Exhibition
  • January 16, 2018Sival Plant Production Trade Show
  • January 17, 2018Dutch Organic Trade Fair
  • January 17, 2018Anfas Food Product
AEC v1.0.4

Jobs: Food Packaging

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber





Subscribe Here



Advertisements