With the popularity of coffee in the world, European states and other nations have sought to modify their products by diversifying their coffee into capsules or pods. This market is set to reach a CAGR of 7.3% and around USD 25.8 billion by 2025.Various brands have been developing coffee capsules suitable for consumers to use with their home coffee machines. These capsules come with different flavors and blends to suit individual tastes. The most common one being espresso, has a concentrated flavor designed for refined tastes.
Coffee capsules are mostly single portions of doses of coffee enclosed in a protective casing made of aluminum or plastic. These capsules come in various sizes, depending on their intensity. The quality of coffee capsules has developed over the years, with more aromas available in the market. This has been as a result of extensive and concentrated coffee farming to produce premium coffee brands.
Coffee capsules remain fresh and flavorful by ensuring the equipment used for filling the capsules is set in the right parameters. For instance, a sufficient oxygen barrier sealed well into the capsule guarantees freshness improving the coffee’s richness. The capsule should be well sealed for maximum preservation. Next, using clean water and testing the temperature before positioning the capsule for filling will help in maintaining consistency.
Coffee capsules have become inherently accessible in European and world markets, thus spiking competition levels and increasing diversification in the coffee market. These trends also seek to engage different generations into adapting to new coffee products, increasing coffee intake.
Some of the leading European markets include Germany, France, Italy, and Spain. The use of filtered coffee has seen a tremendous decline over the years in these countries, and the adoption of coffee capsules and advancing at a high rate. For instance, Germany’s turnover rate is around 1.7 billion Euros, while France has a turnover of about 1.2 million Euros with the most significant coffee capsule machines.
The advent of capsule machines has also been prevalent in both European and American homes. For instance, the popularity of the K-Cup in the U.S., a coffee capsule company, and pioneer in the coffee market has generated double growth over the years.
However, market players in the coffee capsule industry should aim to gain a global perspective on the influence of capsules depending on different geographical locations. Identifying growth segments for expansion will also assist in identifying the key competitors. This will help in creating regional strategies depending on market research, and ensure abundance of brands in stores. Market players can also seek to derive suitable drivers aimed at placing them at the top of the competition curve and establishing their products as the preferred choice among consumers. Market executives can strategize on new and advanced ways to use marketing tools to their advantage and improve their product into a premium brand, or adopt partnerships with premium brands to gain a competitive advantage.
Impact of capsules in the coffee market
The advent of capsules being one of the rapidly growing trends in the coffee industry has doubled in size and amassed popularity. With debates in product pricing and positioning, brands have sought to identify significant factors that assist in marketing the capsules:
The effect of premiumization in marketing seeks to elevate a specific product and package it in limited editions, attracting high-end customers in need of a customized experience. This aims to build exclusivity and increase profits as such products are always expensive. Different brands have established various ways to market their capsules or pods to create a niche and stand out from the crowd. For instance, Nespresso has revolutionized their product to create a premium one. However, capsules have moved from a niche product to a mass production product, with market players offering versatility and diversity in pricing, blends, and quality.
The advent of technology worldwide has created a platform for producers to market their products and create a suitable consumer experience. By exposing the consumers to a variety of specialized coffee capsules, they develop different palettes and actively search for options. Companies have since updated their websites and service pages to offer an assortment and description of coffee blends.
With coffee capsules, consumers enjoy the following benefits:
- Hassle-free coffee – There is less grinding, weighing, and timing when preparing coffee capsules, and they can be used with or without a machine. There is also less risk, especially when brewing expensive coffee.
- Faster results – Brewing coffee capsules is quicker and less messy than roast coffee.
- No roast by dates – With capsules, you do not have to worry about expiration dates tied to your coffee’s freshness.
- Biodegradable and recyclable – Capsules are increasingly coming in biodegradable material, ensuring an environmentally friendly atmosphere by maintaining sustainability.