Nespresso suffers with generics

Mondelez International Inc., the second largest producer of coffee in the world, will begin to sell Nespresso compatible capsules in the whole of Europe in the second half of this year, increasing the competitive challenge for the brand Nestle SA. The Mondelez, based in Deerfield, Illinois, in the United States, will sell the generic capsules under its brands Jacobs and Carte Noire in Germany, France, Austria and Switzerland, according to Roland Weening, Vice President of strategy, marketing and innovation.
Nestlé, Vevey, Switzerland, filed infringement proceedings
patent against some rivals who introduced capsules compatible with Nespresso machines, but until now has not been able to stem the flow of capsules copied by d. and Master Blenders 1753 and others. "We want to leverage our brands and offer all the paths to the Cup," said Weening. "We evaluated for some time and felt it was the right time".
Separated from Kraft Foods last year, the Mondelez already sells its own drinks, the Tassimo machine, since 2005. Weening said the tender of Nespresso compatible capsules wouldn't "despriorizar" the Tassimo, which has sales of about $ 1 billion. Generic capsules reduce profit of Nespresso Nestle, the maker of Nescafé Dolce Gusto, and dominates the European market of coffee in individual portions with a share of 70%, according to Andreas Von Arx, an analyst at Helvea AG. Nespresso cultivates a unique image for the brand through ads with actor George Clooney and boutiques that offer wine-tasting lounges in places such as the Champs Elysées in Paris. This approach has made one of the brands of Nespresso fastest growing and most profitable of Nestlé. Nestle stopped disclosing details of the designer's sales reports in the middle of last year
due to "competitive environment".
"The pressure has been growing from compatible capsules," said Von Arx, in a report in November. "With the main patents expiring or being challenged in the courts, currently the main markets open for producers like Nespresso capsules compatible". The consultant estimates that lost 10% between Nespresso and 20% of the market for imitations in some countries. In its most recent fiscal year, the sale of capsules L'or of d. and Master Blenders, which work in Nespresso machines and are sold throughout Europe, increased in
€ 60 million ($ 79 million), the company said in August. There are about 50 capsules vendors across Europe, said Weening, and Nestle said there were only 30 in his home country, Switzerland. The lawsuits of Nestlé, which include processes in several European countries, so far have not prevented rivals to sell compatible pods. The most recent decision came in April, when a unit of Nestlé lost a patent infringement action that tried to prevent the Dualit, a company in the United Kingdom, to make capsules Nespresso machines. "We did our job and we are confident in the fun part," said Weening the day before yesterday.
The price of Mondelez capsule, or their places of sale were not disclosed. The Nespresso capsules cost about € 0.35 per Cup. In Brazil, the company's website, each capsule is sold at $ 1.50 and the purchase of an espresso machine there are bonuses of $ 100 to purchase refills.