- Last week, Nespresso and Blue Bottle announced the upcoming launch of their Blend No. 1 capsules
- Nestlé acquired a 68% stake in Blue Bottle in 2017 for approximately $700 million
- This is a clear next step for Nestlé and a further sign of the commercialisation of specialty coffee
ON 5 October, Nespresso and Blue Bottle Coffee announced the launch of their “limited edition” Blend No. 1. The capsules represent the first coffee the two brands have co-developed.
Blend No. 1 has been developed for Nespresso Vertuo machines and will be available to buy from 18 October. However, from 6 October, Nespresso stores have been offering tasters to particularly keen customers.
According to the press release, the Nespresso and Blue Bottle capsules contain a post-roast blend from Ethiopia and Uganda, both natural processed. The brands also talk about development times and the different tasting notes you can expect from each component.
The way that the brands are talking about the coffee shows that Nespresso is keen to leverage Blue Bottle’s reputation and existing consumer audience – yet another step on its journey to commercialise specialty coffee en masse.
For Nespresso, this partnership allows them to appeal to a consumer demographic that holds an increasing amount of influence in the coffee industry. With the launch of their colourful, affordable Vertuo Pop machines, Nespresso is clearly trying to appeal to younger consumers – a contrast to the historic approach of marketing Nespresso as an exclusive luxury product.
A predictable move
This partnership is exactly the kind of project Nestlé acquired Blue Bottle for. By leveraging the brand’s reputation for quality, it can more readily expose a younger, previously-inaccessible market segment to one of its flagship products.
Once launched, these “co-developed” capsules are well-positioned to compete when we consider the resources behind them.
However, the narrative around the capsule collaboration has treated it not as a natural next step – but instead as an unforeseen surprise.
“Framing up this capsule collab as a surprise is a surprise itself,” says Jesse Hartman, the co-founder and host of The Coffee Podcast. “It reads like an organic or spontaneous collaboration, but I find that surprising considering Nestlé’s majority stake in Blue Bottle.”
Indeed, the press release describes it as “a fusion of worlds that was discovered by curiosity”, and claims the collaboration is an “unlikely one”.
These statements are debatable at best. Nespresso’s CEO said the brands have been developing this product for three years, and it’s probably been on the agenda since the acquisition.
A more appropriate question would be: why has this taken so long? While it’s tough to say for sure, it could well be that Nestlé first wanted to test the brand’s reputation through products such as instant coffee.
“At Blue Bottle, we’ve been exploring other brew methods as we consider how we can meet people wherever they are in their coffee journey to share delicious coffee,” says Cara Ray, global product director at Blue Bottle Coffee. “As part of that exploration, we introduced Craft Instant Coffee last year. This collaboration with Nespresso provides another opportunity to make specialty coffee more accessible.”
In addition, these “limited-edition” coffee capsules are most likely not limited at all – this product has probably been in the works for a long time, and it’s easy to assume that it’s here to stay.
Just the beginning
Nevertheless, this product launch raises a broader question: is it possible for specialty coffee brands to reach this kind of scale and offer capsules successfully without being acquired?
Any kind of mass capsule rollout requires a substantial amount of infrastructure and investment – and the resources of a large multinational are an obvious advantage.
It also reinforces how heavily these major coffee brands are pushing to capitalise on the ever-growing demand for capsules and single-serve. Another example is Intelligentsia’s collaboration with Keurig (launching pods for its K-Café system). This is another example of a heritage specialty coffee brand seeking to enter the segment – and likely something only made possible by their multinational ownership.
The rush extends beyond the multinationals, however. Across the board, coffee roasters are investing in the infrastructure they need for private-label and co-packed coffee capsules (such as Metropolis Coffee Company) – showing just how unstoppable this growth is.
Either way, for Nespresso and Blue Bottle, Blend No. 01 is just the beginning – as evidenced by the number in its name. It shows that if you have the means, acquiring an established specialty coffee brand and using it to corner rapidly-growing categories is a clear path to capturing a new audience. As for what this means for the rest of the market? Only time will tell.
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