Believe it or not, there is a world where George Clooney walks into a room and women remain perfectly composed.
It is the world of Nestlé SA’s advertising for its single-serve espresso machine, Nespresso. The ads – which feature Mr. Clooney being ignored by ladies who are more interested in a dark, rich espresso than the movie star – have been running in Europe for a number of years. They will now form the basis for a similar strategy in Canada, as part of the company’s effort to snap up more of the fast-growing market in North America.
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The ads, which will feature Penelope Cruz and are slated to hit Canadian TVs on Dec. 3, are part of a larger war brewing this holiday gift-giving season as makers of single-serve machines battle over the growing number of people changing the way they get their fix. While 78 per cent of the coffee prepared at home in Canada is still done in a classic automatic drip machines, according to research firm NPD Group, single-serve makers are now the second-most used machine at 31 per cent.
So far this year, the market for single-serve machines in Canada has grown 58 per cent, reaching $113.2-million in sales – a number that is expected to surge even further during the holiday shopping period.
“Within the last 24 months, the single-serve has grown dramatically,” said Robert Carter at NPD. “We expect huge, huge volumes in these single-serve machines over the holiday period.” According to the company’s research, more than one-quarter of Canadians are making more of their coffee at home, partly in an attempt to save money. And the popularity of single-serve machines – which brew hot drinks from individual pods – has made for a crowded market.
Keurig currently dominates in Canada, while the No. 2 machine, Kraft Food Inc.’s Tassimo, has been aggressively expanding its association with trusted brands: It boasts coffee pods from Tim Hortons and Second Cup, for example, as well as Nabob and others, tea from Twinings and Tetley, and Cadbury hot chocolate. Starbucks Corp. began selling its own single-serve machine in September. NPD’s research suggests consumers are drawn to the products because they save time, and produce a good-tasting beverage more consistently.
The challenge for Nespresso will be to address the confusion in the market, said Jacques Demont, president of Nespresso Canada. While other machines specialize in a number of drinks, largely concentrated on drip coffee and also sometimes offering espresso and cappuccino options, the Nespresso machines are focused on espresso only. The new national campaign is aimed at creating an image of sophistication and difference.
Another marketing tool for Nespresso has been its boutiques: it built a café on Crescent St. in Montreal, to draw in out-of-home coffee drinkers, let them try the product, and then direct them to a second-floor showroom where they can buy a machine. The company is now constructing another coffee bar in Toronto’s Yorkville neighbourhood, and plans another next year in Vancouver. It is also opening boutique showrooms, without a café, across the country in Bay stores where the machines are sold. Mr. Demont sees this holiday as a key season for single-serve coffee makers to increase their sales in Canada.
“The competition is big. People are more and more coffee lovers,” he said. “We are selling to more connoisseurs.”
The Canadian coffee drinker
73 per cent: Proportion of Canadians over the age of 16 who drink coffee weekly.
2 cups: The amount of coffee the average drinker consumes a day.
63 per cent: Amount of that coffee that is made in-home, versus purchased at restaurants or cafés.
How the single-serve market shakes out
Market share for the major single-serve coffee machine makers:
Keurig – 40%
Tassimo – 25%
Black & Decker – 6%
Cuisinart – 2%
Nespresso – 2%
Other – 25%