The new capsules are distributed in different networks, hence reaching another population and different customers. Among the many rivals of Nestle, we met Capsul’in in late September in Paris.
An example of forward integration
Capsul’in had offered its capsule to independent coffee roasters and retailers. The latter became able to put their own coffee specialties into Nespresso-compatible capsules. The next step was obviously to propose ready-to-use capsules which have now been effective since May 2013.
In strategy this move is called a forward integration: a supplier integrates in its value chain what its clients were doing (roasting and encapsulating the coffee) and suddenly becomes one of their competitors.
Priced slightly under Nespresso
The result of this move is “Cap Mundo”. Priced at 0,29€ per capsule it is slightly cheaper than the Nespresso original ones. For the moment the product range is made of 4 references and one decaffeinated coffee (washed with water rather than with chemical products). Packaging-wise Cap Mundo adopts a format which is similar to that of Sara Lee and which should fit well on supermarket shelves. Interestingly enough Cap Mundo has followed the same categorization scheme as Nespresso: coffees are positioned according to their strength. A well-thought symbol (a stylized coffee bean) is used to depict a 5-point scale).
Which perspectives for Cap Mundo?
Cap Mundo had found a very clever positioning by offering their technology to traditional roasters who were missing a part of the market. They will however have a hard time competing on supermarket shelves against the Sara Lee of this world. In my opinion the price difference is not big enough to have consumers changing their habits. The quality claims (low temperature roasting, roasting process done by batch) may also be insufficient to convince the majority of consumers.Tags: market research belgium, marketing strategy