Nestle and Starbucks global coffee pod battle heats up

Posted by AFN Staff Writers on 22nd October 2012

Nestle, owner of Nespresso, and Starbucks Corporation, which own the Starbucks Verismo system, are in a heated battle over the global single-serve coffee market.  The coffee pod market is booming globally.

Nespresso is already hugely popular in Australia, where Starbucks’ single-serve coffee machines are yet to be released. Nestle Nespresso have a number of different machine manufacturers including Krups, Turmix, Delonghi and Magimix.

Market research company Euromonitor recently also reported that sales of coffee pods in China has climbed 50 per cent last year, compared with 19 per cent growth for standard ground coffee.

Nestle recently announced its nine month sales results with 9.4 per cent organic growth in the Asia, Oceania and Africa regions.

Nestle’s  Nespresso division did particularly well globally, achieving double-digit growth in a period characterised ‘ by a high level of innovation.’ In 2011, Nespresso accounted for 4 per cent of Nestle’s overall sales with revenue of CHF 3.5 Billion. The Nespresso results included more “limited edition” coffee launches and new machines, as well as many boutique openings.

Starbucks has said they will launch its Verismo single-serve system in 2013. The Verismo is part of Starbucks’ long term strategy to tackle the single-serve coffee market around the world.

Starbucks CEO Howard Schultz said in April 2012 that with Verismo, Starbucks has a formidable strategy in place to capture more of the $8 billion dollar a year single-serve coffee industry in the United States.

Starbucks Corporation plans to release its fourth quarter and fiscal year end 2012 financial results after the market close on Thursday, November 1, 2012.