Dive Brief:
- Nestle SA's Nespresso is breaking ground on a factory in Switzerland to produce pods for its VertuoLine coffee machine, specialized for the U.S. market.
- Nespresso, which is Europe's biggest single-serve coffee brand, is seeing high double-digit sales growth in the U.S., surpassing the high single-digit sales growth in Europe.
- The VertuoLine produces an 8-ounce serving that capitalizes on the North American market's preference for larger cups of coffee.
Dive Insight:
The single-serve market in North America is valued at $5 billion with companies ranging from Nestle and Keurig Green Mountain to Starbucks vying for the top spot in the single-serve brewers and pods segments.
Nespresso chairman Patrice Bula told Bloomberg that the company is seeing the expansion in the U.S. market that it expected for the European market. "Of course you have much more competition, and of course it’s a more mature market," she said.
Nespresso has also ventured into the brick-and-mortar format with more than 400 boutiques across the world, including 36 in the U.S. The boutiques feature Nespresso's single-serve pods in a luxurious, high-end setting.
"North Americans are different consumers," Nestle CEO Paul Bulcke told Bloomberg. "They do drink espresso, but for special moments in high-level restaurants."