M for multifunctionality
Coffee Delizio is Migros' new capsule system. Exxtra is launching the brand in a sensorial way, highlighting its performance benefits.
Delizio coffee is the new capsule system from Migros. Exxtra launches the brand in a sensual way about the performance benefits. The damper came shortly before the promising market launch from Leutschenbach: in a blind test for Kassensturz, coffee experts relegated the Migros coffee system to second last place.Annette Bernath, Head of Product Management at Migros Birsfelden, where over 13,000 tons of coffee are roasted every year - around half of Swiss consumption - reacted to the result with the calmness of an experienced person: "Several independent tastings have come to the opposite conclusion," she says and makes it clear, probably not for the last time, that Migros will not be joining the battle against the previous capsule system monopolist Nespresso. Strictly speaking, this assessment is correct, because Delizio, as the system is called, brews more than just a "high-quality" coffee and is therefore not simply a me-too product. Delizio also stands for high-quality tea enjoyment. Hence the visually welded brand name suffix: Non solo caffè.
Boom market coffee capsulesThe Federation of Migros Cooperatives took over a year and a half to develop its own system - and even recruited Eric Favre, one of the Nespresso developers, for the project.
The aim was to make up for the crumbling market share in the stagnating coffee market by expanding into the higher-margin gourmet segment and to regain brand authority over the competition. While the orange giant controlled over 50 percent of the coffee bean market until a few years ago, according to ACNielsen's retail trade panel, this market declined at an above-average rate in terms of both value and volume between 2000 and 2002. And this despite half-price promotions.
The picture was similar for shares in the coffee machine market, which grew by over 15 percent in the same period - mainly thanks to fully automatic machines and capsule systems. Here, too, Migros' figures went against the positive trend, which was mainly characterized by Nespresso. In 2002, there were four Nespresso machines among the top five coffee machines. With the focus of the premium coffee niche market on households, licensed machine and capsule manufacturers continuously generated double-digit growth rates, with capsule rather than machine sales being profitable for Nespresso.
While bean coffee sales have remained relatively constant over the years, the consumption of capsules and pods has risen rapidly. No figures are currently available from market leader Nespresso (ahead of global leader Lavazza in Switzerland). However, Eric Favre estimates that the spoiled Swiss consumer is becoming increasingly fond of the more expensive convenience products and assumes that Nespresso's capsule sales will grow by a further 30 percent in 2005 compared to the current year.
Its forecasts and market research show that the potential of the ongoing espresso trend has not yet been exhausted. Coop's efforts to develop its own system have also been leaked. Apparently, both wholesalers assume that many consumers have been waiting for a cheaper competitor offering, even in younger segments. "For Migros, it was clear from the outset that it wanted to sell a capsule system that was not compatible with Nespresso," says Michael Broglin, consultant at advertising mandate holder Exxtra. It is therefore clear that Delizio's launch in the pre-Christmas market is intended to exploit its lead over Coop, but above all to shake up the entire industry. Migros is breaking through two important marketing pillars in Nespresso's home market: the distribution channels and the pricing policy.
High-profile competitive strategyThe motivational campaign for the 85,000 Migros employees, in which they could each buy two Delizio machines at a bargain price, met with an enormous response. Orders for over 60,000 units were received within a few weeks. Interest in Delizio was sparked by media reports (PR: Burson Marsteller) back in the summer, when the new brand name was still unknown.
To prevent bottlenecks at launch, machine manufacturer Gaggia had to increase its production capacity. Those responsible are therefore likely to be euphoric about the sales curve for the five Delizio coffee and initially two tea varieties.
In order to stand out from the elitist, cultivated market leader, the Exxtra creative team developed a campaign in which the performance benefits - wide availability, value for money and multifunctionality - are communicated. This added value is communicated in two TV commercials in a sensual and ironic way: Just as Delizio not only brews coffee but also tea, the femme fatale in one commercial wants to keep all her options open when choosing her dates - sometimes Claudio, sometimes someone else. The tonality of the copy ads is similarly differentiating, linking the benefits with Delizio's uncomplicated and charming brand personality. This was also consistently developed further on the Internet, in the packaging design and in the below-the-line measures - from the two tasting waves to the Delizio points and the special shelf. Not to mention new Delizio products that are still in the pipeline.
Traditional brandIn 1938, Achille Gaggia invented the modern coffee machine, which uses water pressure rather than steam to produce espresso with the typical foam. Since 1977, the company in Robecco near Milan has been producing not only catering machines but also household appliances. Gaggia produces the Delizio machines for Migros. (la)
Delizio TV commercial: Sometimes this man, sometimes that man - sometimes coffee, sometimes tea.
Luca Aloisi
Boom market coffee capsulesThe Federation of Migros Cooperatives took over a year and a half to develop its own system - and even recruited Eric Favre, one of the Nespresso developers, for the project.
The aim was to make up for the crumbling market share in the stagnating coffee market by expanding into the higher-margin gourmet segment and to regain brand authority over the competition. While the orange giant controlled over 50 percent of the coffee bean market until a few years ago, according to ACNielsen's retail trade panel, this market declined at an above-average rate in terms of both value and volume between 2000 and 2002. And this despite half-price promotions.
The picture was similar for shares in the coffee machine market, which grew by over 15 percent in the same period - mainly thanks to fully automatic machines and capsule systems. Here, too, Migros' figures went against the positive trend, which was mainly characterized by Nespresso. In 2002, there were four Nespresso machines among the top five coffee machines. With the focus of the premium coffee niche market on households, licensed machine and capsule manufacturers continuously generated double-digit growth rates, with capsule rather than machine sales being profitable for Nespresso.
While bean coffee sales have remained relatively constant over the years, the consumption of capsules and pods has risen rapidly. No figures are currently available from market leader Nespresso (ahead of global leader Lavazza in Switzerland). However, Eric Favre estimates that the spoiled Swiss consumer is becoming increasingly fond of the more expensive convenience products and assumes that Nespresso's capsule sales will grow by a further 30 percent in 2005 compared to the current year.
Its forecasts and market research show that the potential of the ongoing espresso trend has not yet been exhausted. Coop's efforts to develop its own system have also been leaked. Apparently, both wholesalers assume that many consumers have been waiting for a cheaper competitor offering, even in younger segments. "For Migros, it was clear from the outset that it wanted to sell a capsule system that was not compatible with Nespresso," says Michael Broglin, consultant at advertising mandate holder Exxtra. It is therefore clear that Delizio's launch in the pre-Christmas market is intended to exploit its lead over Coop, but above all to shake up the entire industry. Migros is breaking through two important marketing pillars in Nespresso's home market: the distribution channels and the pricing policy.
High-profile competitive strategyThe motivational campaign for the 85,000 Migros employees, in which they could each buy two Delizio machines at a bargain price, met with an enormous response. Orders for over 60,000 units were received within a few weeks. Interest in Delizio was sparked by media reports (PR: Burson Marsteller) back in the summer, when the new brand name was still unknown.
To prevent bottlenecks at launch, machine manufacturer Gaggia had to increase its production capacity. Those responsible are therefore likely to be euphoric about the sales curve for the five Delizio coffee and initially two tea varieties.
In order to stand out from the elitist, cultivated market leader, the Exxtra creative team developed a campaign in which the performance benefits - wide availability, value for money and multifunctionality - are communicated. This added value is communicated in two TV commercials in a sensual and ironic way: Just as Delizio not only brews coffee but also tea, the femme fatale in one commercial wants to keep all her options open when choosing her dates - sometimes Claudio, sometimes someone else. The tonality of the copy ads is similarly differentiating, linking the benefits with Delizio's uncomplicated and charming brand personality. This was also consistently developed further on the Internet, in the packaging design and in the below-the-line measures - from the two tasting waves to the Delizio points and the special shelf. Not to mention new Delizio products that are still in the pipeline.
Traditional brandIn 1938, Achille Gaggia invented the modern coffee machine, which uses water pressure rather than steam to produce espresso with the typical foam. Since 1977, the company in Robecco near Milan has been producing not only catering machines but also household appliances. Gaggia produces the Delizio machines for Migros. (la)
Delizio TV commercial: Sometimes this man, sometimes that man - sometimes coffee, sometimes tea.
Luca Aloisi
