Nespresso has been long in discussion with it’s patented business format of using only the Nespresso pods with it’s machines and not the others. Swiss Ethical Coffee Company, which first challenged Nestle for it’s monopoly on use of only their capsules in it’s machines, is now winding up it’s losing business.
The Swiss company at their peak times were producing around 300 million of compatible Nespresso capsules in a year which is a huge figure. Now they have decided to bring down the production to 10-15 million pods a year ‘just to please their most loyal customers’, said Jean-Paul Gaillard, CEO of Ethical Coffee Company (ECC). He also added that the company will now be focusing on producing next generation environment friendly and more flexible format of capsules. He also said that the company has been struggling a lot with legal swabs by Nestle and also the competition by around 100 other companies penetrating in the same business format. These all losses have combined and hit hard the ECC.
Gaillard founded his business back in 2008 after leaving Nespresso as chief executive officer for 10 years. There were numerous varieties like Classic Inca Soave, Classic Decaf, Classic Ristretto, Classic Arabica Forte, Arabica Supreme, Mandheling Supreme, Romanov, Lungo and a lot more.
Nestle is involved in many court cases among which most are already lost and most of the cases revolve around jamming their Nespresso machines from using third party pods.
Gaillard also mentioned that this pattern of business is now not on the way to make money but rather it’s just losing the time. With so much of competition and legal subsides, the losses cover over the profits resulting in non-profitable business which no one wants to get involved.
News Source: Manila Bulletin