Issue link: http://read.dmtmag.com/i/491356
STiR tea & coffee industry international 55 While Nespresso's Grand Crus coffees are highly rated, capsules from pre- mium regional and local roasters would popularize food service brewers at a price point acceptable to Nespresso. Adoption will be rapid as restaurants serv- ing espresso save significant machine and labor cost. As an example, wholesale coffee represents 70% of Intelligentsia's busi- ness which would greatly expand with restaurant adoption of single-serve. At 85-cents per capsule the roaster earns $35 per pound. Significant investment in Portland-based Stumptown Coffee Roasters and a $46 million investment in Oakland, Calif.-based Blue Bottle Coffee Co. expanded roasting capacity as well as retail presence. Coffee innovation is occurring in the U.S. where the experience is cen- tered on a really, really nice cup of coffee, said HiLine's Kakaulin. The empha- sis at third-wave shops is on improving quality, he explains. "Super-premium is not something a café, or restaurant or book store is willing to invest in," he said, adding that the cost of a Nespresso machine is nothing compared to the expense of hiring and training baristas. "Nestle is looking for FMCG (Fast Moving Consumer Goods) volume sales and therefore has little interest in small lots that can be sold at only a few retail locations for a limited time. Small roasters, however, have the ability to take a 10-bag or 50-bag lot of rare coffee and sell it at price points not tested before by larger-scale roasters," Hetzel observes. But can a Nespresso machine do justice to artisan roast? Quality Cup Crema retains its mark of distinction and only a pressurized system like Nes- presso delivers crema. "Nespresso has done an amazing job with their devices and their coffees," writes Kenneth Davids, editor at CoffeeReview.com. "Other espresso capsule systems work well, but the coffees in the capsules are simply not competitive in quality and variety to the Nespresso coffees," he said. The engineers who designed the machines did their work rather well; now the companies that support the machines need to get their coffee act together, he said. Nespresso sources excellent coffee but what sets it apart are roasts carefully matched to the latest generation Nespresso machines. The result is consistency and speed that already has convinced one third of the world's 2,400 Michelin- rated restaurants to install Nespresso ProfessionalLine equipment. The trend will accelerate as respected chefs at acclaimed restaurants such as Corton in New York City, The Square and the Fat Duck in London and associations like Les Grandes Tables du Monde, Bocuse d'Or, Madrid Fusion and Cook It Raw praise refinements to the equipment and blends. There are 132 Michelin rated restaurants in the U.S. A few, including Al- dea in New York City serve Nespresso. It is only a matter of time before qual- ity roasters fine-tune their blends for appreciative chefs as Starbucks did for Mark Canlis in Seattle. "The small batch single-serve market is a new frontier but I feel that the opportunity exists to build it in a way similar to how specialty retailers built the market for higher-end whole bean coffees; by selling direct to consumers online, at retail cafes and quality-focused wholesale channels," said Hetzel. Duvoisin told the Wall Street Journal "It's very easy to go out and sell ma- chines, but we don't sell machines, we sell coffee. If you're not sure that the machines are bought by people who want to drink good coffee every day, then you are fooling yourself. You have big sales of machines, people buy coffee at the beginning and then they taste it once or twice and then they stop. That's the worst thing you can do. So you should make sure the people who buy your machines are entering a pattern of ongoing coffee consumption." "We offer the best coffee quality," said Duvoisin, "At the end of the day, it's what you have in the capsule that counts." Penélope Cruz pitches Nespresso.