Treat coffee as red wine, Nestl é beat Starbucks and UCC

Who would have thought that a capsule selling for less than $1 could revolutionize a century-old cheap coffee brand?

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With two new coffee brands, Nespresso and Dolce Gusto, Nestl é has rewritten the global way of drinking coffee, creating a new $10 billion market and polishing the brand of Nestl é, a century-old brand.

Since the launch of Nestl é, nearly 30 billion encapsulated coffee have been sold worldwide. Nestl é has not only established a new coffee empire, but also attracted a large number of peers to follow suit, including Starbucks, the global coffee chain, UCC, the largest coffee supplier in Japan, and Illy, the established espresso brand.

In fact, Nestl é invented the world's first capsule coffee maker as early as 1976. Why is it so popular recently?

The key is to treat coffee as red wine.

Nestl é, which started with three-in-one instant coffee, initially did not know how to sell the product. The advantage of the capsule is that it is fast and convenient, as well as the aroma and taste of freshly brewed coffee. But expensive machines are generally unaffordable for families. Nestl é started from a professional coffee shop, trying to replace the traditional manual brewing method, but unexpectedly triggered a backlash from practitioners, regarding the capsule as the invasion and threat of the evil empire.

Nestl é had no choice but to turn to wealthy families, but at that time, the price of a capsule coffee machine was almost the difference between a Ferrari sports car and a domestic car, and retail stores were reluctant to buy it easily. By 1987, half of the capsule coffee makers were unsalable.

Until 1989, Nestl é changed to a new strategy: treat coffee machine users as senior club members! Consumers can get a membership card as long as they buy a machine. Are you out of capsule coffee? A phone call will be delivered to your house immediately. This trick really worked, and the number of members began to grow steadily, turning from losses to profits in 1995 to 300000 in 1997, bringing Nestl é about US $100, 40 million in revenue.

This boosted the morale of the Nespresso team. Next, they partnered with Swissair to deliver capsule coffee to first class. It is not unusual for these European tycoons to drink high-end red wine on the plane, but suddenly it is amazing to be able to drink authentic espresso at an altitude of 30,000 feet. Under the aroma of coffee, in just five years, 20 airlines have introduced it to first class. This makes Nespresso officially become a boutique group.

In addition to five-star hotels and first-class airplanes, as of 2014, there were more than 750 Michelin-starred restaurants around the world serving Nespresso, and the Chef Dinner has become one of the most starry chef communities in the world.

The first French star restaurant in Taiwan, headed by legendary French chef Jo ë l Robuchon, once hosted a high-end dinner. Paolo Basso, the world's most outstanding sommelier, teamed up with executive chef Olivier Jean to create the dinner, but instead of the red wine from the five wineries, the capsule coffee was poured into the goblet that night.

Although Nespresso is under the control of Nestle Group, it does not publish a formal financial report because it is an independent company. The Wall Street Journal estimates that its revenue exceeds $3 billion a year. This small capsule has created a new business legend.