Competition

We have Nespresso machines for coffee.  We were getting fed up with spreading ground coffee everywhere whenever we made a cup, and decided that this new-fangled system would solve the problem.  So we have a machine for the house and a "pro" machine (takes a different shape of capsule so people don't nick them from work for their home machines) for the gîte, and have had these machines for a few years.

I'm getting the impression that Nespresso are suffering a bit from competition in this market.  I've noticed a few brands of compatible capsules on the market, and Nespresso have launched a new different-shaped capsule, incompatible with the old machines, and for which there is no competition at present.  We buy our capsules as needed, a system that works fine.  But now, Nespresso are encouraging us to pay a fixed amout each month to build up a credit that we can call down at will.  Er, no thanks.

We have had occasional problems with the pro machine, and have always called out a fixer to fix it.  Doesn't cost too much and the machine is reliable enough, generally speaking.  But now we have been obliged to take out a service contract.   This entitles us to one call-out per year I think, but it's not something we would have done without duress.

All signs of increasing competition.

So what do you do if you want to break in to this market, established by Nespresso?  Well, compatible capsules is one possibility, or you could try marketing your own brand of proprietory capsules and corresponding machines.  (You might try both, of course)   Here's a picture of a new proprietory system and introductory offer that I noticed in our gîte food supplier recently.

Basically, you buy 150 of their coffee capsules and you get a free machine.  Since that means that your coffee costs you €0.286 (+VAT) per capsule it comes out cheaper than Nespresso, and you don't have to fork out anything for a new machine.  If you don't like the coffee, you can just ditch the machine; all you have to do is drink 150 cups of it.  And how bad can it be?  And how do you combat that as a tactic for someone who wants to break into your market?