Nestle’s capsule coffee consumption rises

Actor George Clooney’s choice of so-called capsule coffee over a beautiful woman in a recent TV commercial was meant to underscore the freshness and flavor in the cup of espresso he’s holding, according to Ross Gatta, head of Nespresso Korea.

Nespresso Korea, the local affiliate of Swiss-based Nespresso Nestle, launched its capsule coffee brand and related coffee maker here in 2007, revolutionizing the way people enjoy their java. The coffee comes in sealed aluminum capsules that are used in the machine, which pierces them to produce freshly brewed coffee like espresso, cappuccino and lattes.

Gatta, an Australian, says Korea has huge potential as a coffee market since Koreans tend to quickly adopt Western trends and coffee appreciation in the country is becoming increasingly more sophisticated.

He says the uniqueness of coffee culture in Korea, where powdered coffee mixes represent a large portion of the market, is not an obstacle but an opportunity because this means that Korean consumers prefer convenience when making coffee.

Since the company introduced the Nespresso brand capsule, the market for capsule coffee has grown rapidly. Now, 14 five-star hotels in Seoul serve Nespresso capsule coffee and there are 11 Nespresso cafes at major department stores and office buildings in the city. Nespresso Korea is run separately from Nestle Korea and has its own management.

Nespresso Korea did not disclose specific information about its sales and the number of its employees, but Gatta said its business has had double digit growth in annual sales since 2007.

Q. How is capsule coffee different from regular espresso coffee?

A. Nespresso has developed a system where the perfect amount of coffee is packaged into an aluminum capsule. This capsule is then hermetically sealed to lock in the freshness and flavors. The capsule also locks out unwanted elements such as light, moisture, air and contamination, which could undermine the quality of the coffee. As a result, consumers can experience the highest quality of coffee at the point of consumption consistently and conveniently.

What are the advantages of the Nespresso brand coffee and coffee machine?

There are many competitors but we believe that what makes Nespresso unique and special is that our coffee has premium quality and it is sourced from the top 1 percent of production in the global market today.

And we offer a full range of 16 “Grand Cru” varieties, each a unique blend coffee, and each a perfect combination of body and taste. All of the 16 blends have different intensity levels and taste and that’s why we refer to our coffee as Grand Cru.

Is it very common in Western countries to drink capsule coffee?

Nespresso began with a very simple dream but a very revolutionary idea to enable anybody to produce a perfect coffee just like a barista in Milan or Paris. Nespresso took the idea and launched capsule coffee in Switzerland in 1997. Since then the business has grown rapidly, especially in Western countries, and it is the fastest-growing brand within Nestle.

Why did Nestle establish a subsidiary in Korea?

There are two fundamental reasons why we launched Nespresso Korea. Coffee is the biggest selling beverage in the country. Korea is the No. 2 market for Nespresso in Asia, after Japan, among the eight Asian countries where we are present.

Coffee has higher sales than rice in supermarkets in the country. Korea is quite significant in terms of its size and Korean consumers are very discerning when it comes to coffee.

It was a key driver behind the launch of the Nespresso brand in the country. Since the launch, we have been amazed by the fast growth.

Is Korea’s premium coffee market big enough? Or does it have considerable growth potential?

Korea has a sizable coffee market with 2 trillion won ($1.8 billion) in coffee products sales. So the market is definitely is big enough. And it is changing and evolving quite rapidly.

First, there is an increasing demand for high quality products. Coffee is no exception. Secondly, consumers want more convenience. Third, coffee consumption is increasingly more sophisticated.

What are the characteristics of Korea’s coffee market? It’s been only a little more than 100 years since coffee was introduced to Korea.

Every market is different. I think what makes Korea different from other Asian markets is that there is strong coffee culture.

In other markets in Asia, the coffee culture is not very strong.They are mostly tea-based. And Korean consumers really appreciate high-quality coffee.

How are you approaching the Korean market?

We have been only for three years. Just like other market, our initial focus will be on enhancing customer experience and build brand awareness.

Coffee mix makes up a large portion of the coffee market here. Is it a difficulty or opportunity?

It is an opportunity because coffee mix is a huge part of the market, with nearly a 50 percent market share in Korea.

I see it as an opportunity because this means that Korean consumers want high levels of convenience and consistency. Korean consumers already understand the need for product convenience. As sophistication increases, the popularity of Nespresso will increase.