Nestle to double Nespresso Coffee sales

Nestle to double Nespresso Coffee sales
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First Published: Sun, Mar 11 2007. 11 13 AM IST
Updated: Sun, Mar 11 2007. 11 13 AM IST
By Hugo Miller, Bloomberg
GENEVA: Nestle SA, the world’s largest food company, forecast that its sales at Nespresso coffee unit will double in the next three years, helped by new stores and promotion by actor George Clooney.
Nespresso’s revenue jumped 42% to 1.2 billion francs ($815 million) and sales should reach 2 billion francs by 2010, the Vevey, Switzerland-based company said on 9 March.
Nestle, also the world’s largest buyer of coffee beans, has outsold a similar product made by Kraft Foods Inc. The company has opened Nespresso retail stores in Geneva, London and Paris to promote the system, which consists of espresso machines that don’t require cleaning and use enclosed packets containing fresh coffee.
“We’ve averaged growth of 30% in the last five years, and I’m optimistic we can generate similar growth this year,” Gerhard Berssenbruegge, head of Nespresso, said.
Nestle shares rose 2 francs, or 0.4% to 472 francs in Zurich, bringing its gain to 9% this year.
Nespresso sales accounted for less than 2% of the company’s 98 billion francs in sales last year. It’s still the company’s fastest growing unit.
The capsules retail for about 50 cents a piece. Prices for Nespresso machines, made mainly by Alessi SpA and Miele & Cie, range from $179 (Rs7,924) to $2,099.
Madison Avenue
Nestle, which introduced Nespresso 20 years ago in Switzerland, is looking beyond Europe to tap coffee drinkers in the America and Asia.
Nespresso has exploited its sponsorship of the Swiss yachting syndicate Alinghi, which is due to defend its America’s Cup title later this year, and put its logo on the machines. Berssenbruegge said he plans to open 40 more outlets this year, taking the total to 120.
Nespresso stores are planned for the Chinese cities of Beijing, Shanghai and Shandong. A new distribution centre in Singapore will help expansion in China and South Korea and pave the way for entry into India next year, he said.
Nespresso is also developing machines that make cappuccinos and lattes to extend its appeal to countries that prefer milky coffee such as the US.
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First Published: Sun, Mar 11 2007. 11 13 AM IST
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