Woolworths expansion into coffee pod machines, a vertical extension of a brand?
Woolworths’ latest move in the coffee pod market signals a new trend in brand extension and retail diversification.
Woolworths is the latest to jump on the single-serve coffee machine bandwagon, and its exclusive “Caffitaly S14” coffee-pod machine will be one of the cheapest on the market.
The move by Woolworths seems to be an interesting extension beyond the concept of a supermarket selling small kitchen electrical appliances. The move possibly reflects a new trend for companies, and retailers in particular, to up-sell their branded consumables through the sale of their own dispensing machines. Arguably, this can hook customers directly into the brand’s own vertical supply chain.
Woolworths says that the exclusive Caffitaly S14 will save coffee drinkers around $800 a year through cheaper pod prices, compared to buying a cup of coffee.
According to Woolworths, Australians are spending $150 Million on coffee pods annually, and it is now the second biggest coffee-market, next to instant coffee.
Woolworths Head of Own Label, Matt Cole said that the Woolworths system would offer five strength variants of Woolworths Select coffee pods, and four variants of pods made for the machines by Gloria Jean’s Coffees.
“A flat white made in the Caffitaly system with a Woolworths Select espresso capsule costs just 47c a cup, while an espresso is even less at just 37c for a shot; compare this to $3.50 or more in a coffee shop. If you buy five takeaway coffees a week switching to Woolworths compact capsule system could save you $793 or more over an entire year,” Mr Cole said.
Woolworths said that it’s new coffee system “would be available in more locations nationwide than any other machine.”
“Other capsule based coffee machines can be hard to find, only available in a limited number of stores and difficult to locate ‘boutiques’; by contrast Woolworths system will be available in over 875 supermarkets in suburbs and towns across the country,” the Woolworths spokesperson said.
Meanwhile, Australian Food News recently reported that coffee-giant Starbucks had plans to compete with Nespresso by selling a single-serve coffee pod machine. The Woolworths machine adds to the plethora of machinery choices. Yet, it is unclear whether all these competitors will have equal access to customers. In Australia, Woolworths are in a strong position of control over much of Australia’s supermarket shelf space.
Lindt is expanding its Australian presence, opening a new retail store in Canberra.
THE Asahi Beverages-owned spiced rum brand Untold is launching ‘Rum for the Restless’ – a collaborat...
Originally written by Business News Australia on 19 August 2020. Woolworths Group (ASX: WOW) has...
Coopers Brewery’s future has taken another step forward with Louise Cooper, the daughter of Managing...
There are only a limited number of places left for the Melbourne Foodlegal workshop on 14 November ...
Much-loved Australian dinner time brand MASTERFOODSTM has launched its new brand platform, encourag...
Corporate catering in Australia is a $4.2 billion market. A survey of corporate caterers ran by Aus...
Are things finally starting to look up for Woolworths?
Hi – agree great product – but Woolworths have seriously underestimated the volume of pods etc that are needed to be sold in WA – no Select brand pods to be found in any northern suburbs shops for over a week!
The pod system is a massive market which was orginally dominated by Nespresso
but now we have many players