Nestle Launches Super Size Coffee Maker to Take on Keurig
Mar 05, 2014 01:44 PM EST | By Dina Exil
Americans deserve a bigger cup of coffee -- don't you think?
Fox News reported that Nestle is supersizing its Nespresso coffee machine, a change targeted at Americans who prefer a big cup of joe, compared to a smaller shot.
The company is on a mission to win more customers in a market where Green Mountain Coffee Roasters controls a majority of the sales. The new machine, dubbed VertuoLine, is a single-serve coffee system. It uses different capsules than "those that fit into" the Keurig machines.
It has eight types of 8-ounce servings along with four espresso blends. The company will also have its first ever half-caffeinated Grand Cru, vanilla and hazelnut flavors. FOX News reported the pod "comes equipped with barcodes on the rim which automatically recognize what kind of brew you're making."
Andrew Wood, an analyst at Bernstein, said the machine brings the company closer to the American style of filtered coffee. Wood also acknowledges that VertuoLine is still far behind Green Mountain.
"While there is a potential for the U.S. to become more espresso-based, we think this will take time to develop," Wood said.
Nespresso is one of Nestle's fastest-growing and most profitable brands. Nespresso still makes up three percent share of the U.S. single serve market, while Green Mountain's amount to 72 percent. According to Euromonitor, North America accounts for about 30 percent of the $8 billion single-serve coffee market. Europe comes in second place.
"The North American portioned coffee category has seen tremendous growth, with sales tripling in just three years," said Frederic Levy, president of Nespresso USA, in a release. "Despite a number of in-home offerings in this market, there is no system that delivers the quality and taste in a large-cup offering for which Nespresso is known."
Over the past decade, single-serve has grown from two percent to almost 10 percent of global coffee sales. Other companies that have their own single-serving machines include Cuisinart, Mr. Coffee and Starbucks.
FOX News reported that the company will take VertuoLine on a 17-city tour, giving people a chance to earn a free cup of coffee. The tour will also demonstrate how the machine functions and display all of its benefits.
VertuoLine "will revolutionize the most successful segment of the coffee market in North America and change the way coffee is brewed and enjoyed at home," Nespresso Chief Executive Officer Jean-Marc Duvoisin said in the statement.
VertuoLine sells for $299 and will be sold in the U.S. and Canada at Nespresso boutiques, online and at retailers including Macy's, Bloomingdale's and Williams-Sonoma.