Sondra T. Seecharan
Retail Customer Relationship Manager at Nestlé Nespresso SA
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Stay tuned for what’s to come next! 🎉
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Leonardo DaSilva
B2B Nestlé Nespresso USA | Sustainability Ambassador | B-Corp | Connector| Former Prada and Barneys New York
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Congrats Sondra T. Seecharan & team! - the beginning of a new era in premium coffee experiences.
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Yajhaira (Yari) Tavarez (She-Her-Ella)
National Coffee Training Lead at Nestlé Nespresso SA| Connector | Thought Leader| Uplifting Speaker |ERG Founder/Chairperson | Ally | Instructional Designer
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Inspiring!
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Matthew Bertulli
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I want to use Nespresso as an example of a business with an incredible moat. It's a world-class business and we should all be so lucky to build something like it.I'll give you the story, and at the end my big take-aways.Nespresso is one of the only DTC brands that successfully “removed the middle man”.More than $4+ billion a year in revenue.In 1975, inventor Eric Favre pitched the concept to Nestle. The system was then patented in 1976.For the next 8-10 years they build the product and try and sell single-serve coffee into offices and restaurants. It was a failure.In 1988, they had a massive pivot that turned them into the giant business you know today.Thank the man named Jean-Paul Gaillard for this visionary move.He was well ahead of the times. He even left Nespresso and later launched a biodegradable capsule business in 2008!They ditched restaurants and offices and instead focused on affluent households to establish their toe-hold.Nespresso needed to figure out what business they were in.And what they weren’t.Nespresso decided it wasn’t in the coffee machine business.It was in the coffee pod business.What’s even crazier, is Nespresso started off selling direct to consumer.Catalog and phone sales was the name of the game back then.I also believe Nespresso is Nestle’s only real (”owned” are its main channels) DTC brand.They sold their machines through classic one-time sale focused retail partners. Kitchen, home appliance, coffee specialty and department stores.The coffee however, that’s sold through Nespresso-owned channels.Owning the entire customer experience is the real magic in Nespresso’s business.They crafted very high-end retail stores in major markets.They have the Nespresso Club, aka - membership.And while they started with catalog/phone sales, they are obviously now DTC as we know it.They launched their eCommerce site in 1998.So yah, these things actually do take time to really scale!This is a master class in how to think about distribution channels.You should develop a strategy that leverages channels for what they are best suited for.Now, you might be thinking…but Matt, it’s easy to do this when you have so many patents!And yes, they had a lot of patents. 1,700+.But those started expiring in 2012.Which oddly enough, is 2 years after Nespresso started leaning into owned stores, membership, and a higher end customer experience.They built a moat by going luxury.When you visit a high-end hotel, they don’t have a Keurig machine in the room. They have Nespresso.Ok, enough story.Here are my take-aways from how Nespresso built their business:1 - Start with affluent customers (taste makers).2 - Utilize distribution channels for what they are good at and nothing more.3 - IP(Patents) can be important, but you can’t rest on them.4 - Customer experience is a real competitive advantage.5 - If you want to build something big, you need decades long patience.
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Mark Kaiser
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Kai Roddeck
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Seth Lantz
Business Development and Category Management Professional
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Automation in the cafe space has been a hot topic for years now. Interesting read here, but I disagree with the suggestion that the long term outlook leans toward automate or die. What’s much more important is to understand and serve your customer.Starbucks and Dominos aren’t trying to make the best coffee or best pizza out there. They’re trying to provide a product that’s good enough to please their customers, and do it as quickly and efficiently as possible because THAT’S what their customers value. But that doesn’t mean that there aren’t customers out there looking for the absolute best artisan pizza they can find. Or the absolute best handcrafted cup of coffee they can find. Or the place that makes them feel the most welcome and connected. There will ALWAYS be a market for the best.Understand your customer and do everything you can to provide what’s most important to them. If that involves investing in automation, then automate. But if that involves investing in training a barista to slow down and make it the best…do that instead.
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