Nespresso’s Biggest Rival Is In the Family

Bloomberg News reports that Nespresso’s sales growth has slowed from 30 percent annually in the last decade to 7 percent in 2015. Its biggest rival? Apparently Dolce Gusto, a brand introduced in 2006 for less discerning palates and tighter purses. It also appeals to the sweet teeth of that mysterious consumer group of “millennials,” who—analysts insist—behave like a monolith across geographies and economic status. To be sure, Dolce Gusto costs around 30 cents per serving as compared to more than 50 cents for Nespresso. This may also be related to taste changes over time. Nespresso is at its best in the espresso and strong black coffee category. Dolce Gusto, instead, is richer in cappuccinos and lattes. In any case, it’s a paradigm of business at Nestlé, possibly the biggest coffee brand, and an example of how to make money by having your right hand compete against the left one.

 

 

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