Nespresso brews success with S’pore as regional base

The
aroma of Nespresso coffee is familiar in hotels, boardrooms and
boutiques in upmarket malls but the product’s biggest economic impact
here may be in the less refined surrounds of Changi Business Park.

The park serves as the capsule- coffee brand’s regional command post,
housing a call centre for clients in markets such as Taiwan, China,
Hong Kong and Singapore, and a headquarters to serve regional markets.

Chief executive Jean-Marc Duvoisin told The Straits Times in a recent
interview: “Singapore offers many different nationalities of people who
are so good at languages. Rarely, in my life, have I seen people speak
so many languages so well. It’s good for the country; we have the call
centre here and many managers who develop themselves here.”

Nespresso, which is part of the Swiss food giant Nestle Group,
employs about 100 people here, 80 per cent of whom are Singaporeans.

Switzerland-based Mr Duvoisin, who was here on a business trip, said
Nespresso is “growing nicely” in the market. “We started from nothing,
and our market share has much more potential than where we are now.”

Nespresso first opened its sales and marketing office here in 2007, and the first boutique opened in Takashimaya a year later.

The brand also monitors market penetration, which refers to
households with Nespresso machines. Users insert a capsule into the
machine to brew a cup of coffee.

“We focus on that because when we want to develop (the business), we
look at the market and our target group, who have a certain level of
income, ” said Mr Duvoisin, adding that market share here stood at below
16 per cent.

Nespresso plans to open three boutiques in China, “ending the year in Asia, including Japan, with a total of 40 boutiques”.

Nespresso sells its various models directly to consumers. Mr Duvoisin
said this allows the firm to collect a lot of consumer data, which it
may not get through other business models.

“This direct route to market also allows you, as a company, to
deliver exactly what the consumer expects: on the quality of the coffee,
the new variations we should launch or the new coffee that people
want.”

The business-to-business market is also expanding, said Mr Duvoisin,
noting that there is much potential for growth with offices, given the
number of big corporations here. “We always want to be in the five-star
hotels… Our segmentation is really five-star hotels and the best
restaurants.”

With business growing, Nespresso has had to factor in sustainability.
It reportedly sold an estimated 28 billion capsules worldwide last year
– that is about 28 million kg of aluminium.

Mr Duvoisin said: “What’s important is to recycle your aluminium
capsule. In Singapore, you can put it back in any boutique or send back
the used ones to Nespresso.”

The used dregs are deployed for farming, and the aluminium “can be
used in an infinite way; it’s melted again and can be reused”.

Singapore’s coffee lovers have become more sophisticated, developing more discerning tastes, he added.

The proliferation of speciality coffee shops here in recent years has also raised the beverage’s profile.

Mr Duvoisin said: “In the situation of Singapore and other markets
also, I see this (growth) as quite positive as it helps to develop this
love for and understanding of coffee.”