As many of you already know, I had the opportunity to live in Paris for about two years when I was the Global Sales Training Director for L’Oreal Consumer Products Division.
While there, I fell into the French coffee culture, where an espresso appears in your daily ritual three or four times a day and the company café is where all the important decision are made among colleagues.
While I was in Paris, Nestle was in the midst of launching its premium coffee delivery system called Nespresso. Seemingly everyone in the city was awaiting the opening of the Nespresso flagship store on the Champs Elysees – a true temple to the caffeinated bean.
What is Nespresso? That’s a good question, as here in Canada the awareness is very low and the product is only really available through on-line sales and machines at a limited number of retailers.
At the heart of the system is a small capsule that contains the coffee, which is inserted into the brewing chamber of a specific machine that accepts only Nespresso capsules. There are a myriad of coffee flavors available, each designated as the best selection for specific drinks (espresso, mocha, latte, etc.) and to match your individual tastes.
The capsules are not available at supermarkets – you must buy from a Nespresso shop or through its on-line club.
But why has Nespresso not caught on in Canada? Probably the biggest reason is the lack of Nespresso boutiques in this country. This is where the true experience comes alive and you become tempted to drop $200+ on a machine and upwards of $0.40 per capsule for the coffee.
My wife and I recently visited the Paris flagship after me rambling on and on about it each time I returned from working in Paris. Skeptical at first, she was convinced we needed a machine once she experienced this store.
First, the store feels more like Tiffany than Safeway. You are greeted by a doorman and enter a colossal space which includes a street side café, a machine gallery, coffee bean interpretive centre, accessory boutique and of course the consultation area; where each shopper can have a face-to-face and over the counter interaction with a counselor.
The counselor helps you pick the right pods, introduces new products and logs all of your purchases in your Nespresso Club profile – helping them get to know you as an individual consumer.
Of course, at the back of the store there is a quiet café with great service, where you can experience any of the products served with all the proper ritual and accessories such as Nespresso cups, spoons and even a small palate for a square of chocolate.
In fact, Nespresso has identified the chocolate square as part of the consumer’s coffee ritual and has launched premium chocolate squares as its first extension of the brand. A perfect fit for one of the world’s largest chocolatiers.
As discussed in this article (free subscription required), Nestle has had an exclusive run in the super premium segment of the coffee category until recently. Protected by patents, exclusive distribution through its own channels and the strength of its branding (including George Clooney as its principal “ambassador”), Nestle has a great head start on copycats and private labels.
Nestle has taken a commodity category and created a super-premium segment by focusing on the experience of the shopper and the ritual involved in preparing and consuming its product.
How can you capture this approach and apply it to your category in order to drive profitable and sustainable growth for your business?
Great justification for a “research trip’ to Paris, non?