Coffee company Jacobs Douwe Egberts will launch its aluminium coffee capsules across supermarkets this week. It is yet another front in its competitive struggle against Nespresso and Belgian Belmio.
Higher profit margin
Belmio has been selling aluminium capsules in supermarkets for a while, but at a far smaller scale than Jacobs Douwe Egberts. Nespresso was the sole aluminium capsule player, but ever since it lost its right, several companies jumped at the chance to develop their own version.
Most capsules are made of plastic, but Jacobs Douwe Egberts, with its L’Or and Douwe Egbert brands, claims aluminium capsules maintain flavour and aroma longer. Its new capsules are slightly cheaper than those sold by its major competitor, Nespresso.
It makes sense coffee companies are into these capsules, because their profit margin is a lot larger than regular filter coffee. “A consumer pays about five or six cents per cup of filter coffee, but a capsule easily generates 25 cents”, JDE Nederland CEO, John Brands, told FD. It is also a growth market, unlike the filter coffee market.
Douwe Egberts used to be a pioneer in the coffee-per-cup market, with its Senseo brand, but the increased competition eroded the device’s sales a lot over the past few years.
Jacobs Douwe Egberts’ aluminium capsules are not the only innovation it brings to the markets, because it will also start selling a luxury tea, Joy of Tea, as part of its Pickwick brand soon. Its Douwe Egbert brand will also welcome several organic coffee options.