Last October I explored the striking differences between consumption of coffee pods and fresh coffee in Western Europe and the US, and what that meant for future sales of coffee machines. I came to the conclusion that “…perhaps by investing more in open coffee brewing systems, manufacturers could favour with consumers who might be willing to spend more for a coffee machine that offers them free choice rather than being tied to a brand for life’.
It might be time to think again…
The exclusive capsule system behind the fortunes of Nespresso could soon lose the means of defending its incredibly successful model. The patent on its hard pod coffee machines has been infringed, legally, by the small British company, Dualit, which is now allowed to sell coffee pods compatible with Nespresso machines in the UK.
While this may be a blow for Nespresso’s sales of coffee pods, whose success was based on the exclusivity of the patented system, it could mean more business for coffee machine manufacturers, who combined sold over 3.5 million Nespresso machines in 2012.
Its too early to say for sure, but by losing its exclusivity, Nespresso could potentially become an open system, encouraging consumers who prefer more exclusive coffee brands to now consider the Nespresso machine as a viable option. Until now iconic coffee brands such as Illy and Lavazza have developed their own brewing systems, but with disappointing results. Nespresso machines are marketed as best in class coffee makers, and consumers may now be able to use best in class coffee in them.
My original thinking was that as consumers become more promiscuous with their coffee, as they are in Western Europe, premium open systems would benefit at the expense of restrictive closed systems like Nespresso. If that system is no longer closed, however, it once again becomes a strong contender for consumers weighing up the pros and cons of different coffee machines.
So early after the court ruling there are still many unknowns. Will this precedent be the catalyst for further challenges around the world? How will Nespresso react and how hard will it fight to protect the closed nature of its system?
More at – Euromonitor