With a unique patent, Nespresso created a niche market for themselves. However, after the expiration of this patent, many competitors have developed themselves on the coffee capsule market.
In last weeks blog post, we took a deeper look into the way Nespresso made sure it was better than the competition through innovation, “attacks” on competitors and their most successful strategy: Brand Image. We then compared the products and services of their main competitors Tassimo, L’OR Espresso, Starbucks, Illy, Café Royal and Nescafé Dolce Gusto. Furthermore, we conducted in depth qualitative research into the pricing of each company, the distribution channels as well as the strengths and weaknesses.
Today, we will focus on quantitative research and take a closer look at the more financial aspect of Nespresso and its competitors. We have narrowed down the list of companies to four, Nespresso, Starbucks, Illy and Tassimo. The research includes insights into the financials of each company to be able to analyse what position Nespresso holds on the coffee capsule market as well as where they stand to their competitor Starbucks when it comes to coffee shops.
The individual revenues for 2018:
- Starbucks: US$ 24.72 billion
- Illy: US$ 551 million
- Nespresso: US$ 214.9 million
- Tassimo: US$ 6.1 million
From all these numbers, we can make out that Starbucks is by far the company with the highest revenue in 2018. However, if we were to look at the larger groups that the individual brands belongs to, the numbers would be different. In this case the numbers would be as followed:
- Nestlé (Nespresso): US$ 91.4 billion
- Starbucks Corporation: US$ 24.72 billion
- Jacobs Douwe Egberts (Tassimo): US$ 2.3 billion
- Illy: US$ 551 million
After this analysis we can see that when it comes to the company, Nestlé is very far ahead of the other companies. We have chosen to analyse the results in this manner as it is very interesting to see where the individual brands lie and where the larger companies they belong to stand.
In February 2019, Nestlé released a press release where they stated that they would join forces with Starbucks to launch a brand new range of very high quality coffee products combining the “know-how” of Nestlé with the Starbucks roasting and coffee blending expertise. With the brands Nespresso, Nescafé and Starbucks, the company Nestlé is now, by a very large margin, the biggest coffee company in the world. This decision was a very strategic one from Nestlé as they have continuously (as mentioned in previous blogs) tried to penetrate the rather difficult American coffee market with their brand Nespresso. They have however never been successful, whereas Starbucks is highly successful in the US. The joining of these two forces has also eliminated a big rival for Nespresso which was Starbucks with their range of coffee products and coffee shops.
Before we end the blog for this week, we would like to mention that this agreement between the two companies was made on the 13th February 2019. In our comparison we have taken the revenues of the year 2018 when these two companies were still rivals.
Bibliography:
Unknown author, 13 February, 2019, Nestlé announces the global launch of a new range of Starbucks products to enjoy at home, retrieved from https://www.nestle.com/media/pressreleases/allpressreleases/global-launch-new-starbucks-products
Unknown author, unknown date, Nespresso’s Competitors, Revenue, Number of Employees, Funding and Acquisitions, retrieved from https://www.owler.com/company/nespresso
Unknown author, unknown date, illy’s Competitors, Revenue, Number of Employees, Funding and Acquisitions, retrieved from https://www.owler.com/company/illy
Unknown author, unknown date, e-commerce revenue analytics tassimo.fr, retrieved from https://ecommercedb.com/en/store/tassimo.fr
Unknown author, 2019, Revenue of Starbucks worldwide from 2003 to 2018, retrieved from https://www.statista.com/statistics/266466/net-revenue-of-the-starbucks-corporation-worldwide/
Unknown author, February 14, 2019, Nestlé reports full-year results for 2018, retrieved from https://www.nestle.com/media/pressreleases/allpressreleases/full-year-results-2018
Unknown author, unknown date, JDE’s Competitors, Revenue, Number of Employees, Funding and Acquisitions, retrieved from https://www.owler.com/company/jacobsdouweegberts
Nespresso Boutique Flon 