Convenience, value drive coffee revolution

Our love affair with coffee is getting stronger as technology bridges the gap between instant and espresso drinkers with pod machines that make it a cinch to do a decent short black.

	Nespresso

Sorry, purists, but industry figures show Australians are spending $150 million on pods annually and the figure is tipped to rise.

It's a worldwide trend pioneered 27 years ago by Switzerland's Nestle Group, which developed the Nespresso system of single-serve, encapsulated coffee that has spawned a plethora of competitors to become the fastest-growing coffee category in Western Europe, accounting for 50 per cent of all coffee retail sales in France, Spain and Portugal, according to Euromonitor International.

Ironically, what's regarded as a value-added product - marketers call it "premiumisation" of the industry - in Australia is identified as a mark of the economic crisis in Spain and Portugal, where people are tending to have breakfast at home rather than in cafes as income levels decline, so the popularity of pods continues to grow. There are more than 50 brands muscling into this lucrative coffee market overseas, which has seen pod machine sales go from 2 per cent to 44 per cent in six years, with an estimated rise to 73 per cent by 2015.

Nespresso says it has revolutionised the way millions of people enjoy espresso, with 300 "boutiques" - including 11 in Australia - in nearly 60 countries at the last count. Its outlet in Murray Street Mall opened in November 2011. Members of the Nespresso Club enjoy 24-hour customer service.

"In Australia, the portioned coffee market is now the fastest-growing part of the coffee machine market," says Nespresso Australia's marketing manager Nicole Parker. "Boutiques are the embassies of our brand. Coffee is at the heart of all we do, yet consumer pleasure is why we do it. This has been at the foundation for our brand in Australia and around the world."

No doubt about it, Nespresso offers a premium product, with sleek, high-pressure machines delivering 19-bar pressure and 16 "grand cru" coffees ranging in price from $6.80-$7.80 (pack of 10) in nifty colour-coded aluminium pods. Arpeggio and Ristretto, which are two of the more intense blends, are the big sellers in Australia because we tend to drink our coffee with milk, so prefer a stronger shot. "Limited edition" pods are released annually, with Napoli and Trieste ($8.40 each/10-pack) the latest in the range.

There are more than 10 different coffee pod brands in Australia and Adelaide company Bestspresso, which imports and distributes Caffe Vergnano Espresso 1882 from Italy, just sold its three millionth pod last month. Managing director Toby Bensimon, whose family owns Shiels Jewellers, says busy lifestyles are a key factor driving the shift in Australian coffee habits and pod machines deliver quality with no mess or cleaning.

His step into coffee 18 months ago with businessman Toby Strong was spearheaded by an argument with his father over the cost of Nespresso pods. "I love Nespresso and drink a lot of coffee, but dad said the coffee machine was the first thing that would have to go when we were cutting costs in the office," Mr Bensimon says. "I had to look for a compromise and I'm happy to say, the place is now buzzing. Espresso 1882 pods are about 30 per cent cheaper ($5.49/10) but it's also the availability - with Nespresso you have to buy online or go into one of the boutiques, but we're in Harvey Norman, Officeworks and IGAs.

"Caffe Vergnano is the oldest coffee roasting company in Italy; very old-school, based in Turin. They've been doing these Nespresso-compatible pods for about two years, but they also make their own machine, which we're planning to launch down the track. There are five blends to choose from and Intenso, the strongest, is the most popular in Australia."

Woolworths has drawn the battle lines with its 15-bar pressure Caffitaly S14 pod machine for $99 ($79 for Everyday Rewards members) and a range of compatible pods, including its own Woolworths Select ($5.99/16) and Gloria Jeans ($7.49/16) blends.

Woolworths head of own label Matt Cole says its coffee system is the cheapest on the market and has the potential to save Australians $8.7 billion a year in coffee costs.

"A flat white made in the Caffitaly system with a Woolworths Select espresso capsule costs just 47 cents a cup," he says.

"Compare this to $3.50 or more for a coffee shop."

Make that at least $4 in Perth.

Source: The West Australian, 17 May 2013