It costs "seven to eight times as much" to make a cup of Nespresso brand coffee than it does to brew a traditional cup, and yet Nespresso's sales "grew 30 percent in 2008," reports Matthew Saltmarsh in the New York Times (2/20/09). Nespresso's sales now total $1.7 billion -- a goal its parent company, Nestle, didn't expect to reach for another two years. Nespresso is now "distributed in 50 countries and employs more than 2,500 people worldwide. Most sales come from Europe, but it is also available in Latin America and North America and has made inroads in traditional tea markets like Asia."

What this means is that "Nespresso is now the fastest growing among the most important brands at a company that owns household names like Perrier water, Maggi sauce, Felix cat food, and of course, Nestle chocolate." What's interesting is that Nespresso "probably" did not invent its category -- the so-called "pod machine, which brews a cup at a time from small aluminum capsules that hold just enough grounds for a serving." That credit is claimed by Illy. But it has taken the leadership position on global basis through a combination of marketing sizzle and retail savvy.

Unlike its competitors, Nespresso controls its own distribution through "about 175 boutique storefronts where customers can buy machines, capsules and accessories, sip coffee and taste the lifestyle." At its flagship store, at no less an address than Champs-Elysees in Paris, customers wait in lines "six or seven deep at five cash registers," to buy tubes of capsules, "including some limited edition brands." Why? "I like the mix of coffees, the different flavors, it's nice coffee ... And I like the simplicity," says Pascale Le Guellec, after buying 100 capsules. "It's a very clever, simple and enabling brand," says brand expert Chris Bates, who attributes its success to "democratizing the 'real coffee' experience via the simple operation of its machines." ~ Tim Manners, editor.