Nespresso pods

Mondelez is launching a range of Nespresso-compatible coffee pods

Mondelez is upping the ante in the coffee-pod market by launching a range of capsules that are compatible with Nestlé’s market-leading Nespresso machines.

The new capsules will be stamped with Mondelez’s Jacobs and Carte Noire brands and will launch initially in Austria, France, Germany and Switzerland in the second half of this year.

In addition, Mondelez says it will continue to supports its Tassimo coffee pod system with extra investment as it aims to make it a “billion-dollar brand” - and in the process, “cement” its position as the world’s second-biggest coffee company.

“Our new range of compatible capsules represents increased competition in the fast-growing single-serve coffee sector and is a significant commercial opportunity for Mondelez International,” said the company’s global vice president, strategy, marketing and innovation (Coffee), Roland Weening.

“We will continue to give consumers great-tasting and sustainably sourced products across Europe at a price that is competitive. Jacobs and Carte Noire are among Europe’s favourite coffees and our capsules will provide consumers with the freedom to prepare the coffee they love in the manner they like.”

Copycat coffee pods

Mondelez is not the first company to produce capsules that can be used in Nespresso machines: in April, British firm Dualit won a high-court battle to continue selling its Nepresso-compatible Dualit NX pods.

Euromonitor senior analyst Lorenza Della-Santa said Mondelez’s move was significant because it was the first time a large player had come out with Nespresso-compatible pods. “Long-term Nestlé has the capacity marketing-wise to re-innovate and come up with something that might insulate it,” she said.

“Long-term Nestlé has the capacity marketing-wise to re-innovate and come up with something that might insulate it”

Lorenza Della-Santa, Euromonitor

Nestlé’s strong presence in espresso-drinking markets should help keep competition at bay, she said. “The coffee is good; if it wasn’t, it wouldn’t sell in markets like Italy. The threat would be in new markets where they aren’t present,” Della-Santa added, pointing to Nestlé’s failure to gain a significant toehold in the US.

In March, Nespresso UK and Ireland’s MD, Brema Drohan, shrugged off concerns about copycat pods. “Competition is nothing new for Nespresso. In fact, we thrive in the face of fair competition,” she told The Grocer.

“We will continue to build our success on creating the highest quality coffee, innovative machines and exemplary service.”

The UK coffee-pod market was worth £56.1m in the year to February 2013, up 45.1% year on year, according to Kantar Worldpanel.