Coffee with George Clooney
Lifestyle Nespresso wants to be more than just coffee, it wants to convey an attitude to life. The clever marketing strategy makes this possible.
He doesn't exist as a cardboard figure in shop windows, and he doesn't tolerate commercials in his home country, the USA. Nevertheless, George Clooney keeps the cash registers ringing at Nespresso. "We owe a quarter of our growth to him," explains Gerhard Berssenbrügge, CEO of Nespresso, a Nestlé subsidiary. Before hiring Clooney as a cool yet cheerful Nespresso ambassador, the company polled members of the Nespresso Club, which the company uses to retain its millionaire clientele. James Bond actors were on the shortlist, as were Sharon Stone and Placido Domingo. "Clooney swung to the top," says Berssenbrügge, "Women and men like him because he's good-looking, intelligent and has a sense of humor." The movie star enjoys capsule coffee in television commercials, shines in glossy ads in exquisite print media, or opens Nespresso boutiques for a change. For this he gets several million a year, how much they don't want to reveal, but obviously the heartbreaker is worth every dollar.
Initially not a success In 1986, Nespresso was not really a success story for many years. The pile-driving days of the capsule era hardly indicated that the concept would generate around 1.16 billion Swiss francs in sales in 2006. The innovation was initially marketed in four portioned coffee blends, which were produced in Switzerland and launched in faraway Japan. This country was chosen so as not to lose face in the event of a flop in Europe.
Despite a slow start, Nestlé's technicians consistently improved the capsules, optimized the machines, and the specialists sought out the world's best coffee blends, which got around among connoisseurs. After ten years, the new form of coffee enjoyment finally broke even, but then things started to look up.
Capsules, machines and a club "We have combined several existing elements into a new whole," says Gerhard Berssenbrügge. Today, Nespresso is a closed system from which the customer, once won, is never released. Only the Nespresso capsules, which are not quite cheap at around 40 centimes each and contain a selection of the best coffees, go with the inexpensive, distinctive, stylish and practical coffee machines. At the beginning of the 1990s, marketing professionals launched the Nespresso Club, a clever move that tied customers to the brand.
As early as 1998, a website was set up (www.nespresso.com) where customers could order capsules and automatically become Club members. All elements of marketing played together to support the brand. "Nespresso. The magazine for life's precious moments" was launched, a pleasantly soft-spoken panorama of the beautiful things in the world such as design, travel, upscale living, and good food. In 1999, the company achieved sales of 154 million and had half a million club members; today, there are more than two million members who receive the magazine three times a year.
According to Berssenbrügge, the company spends around 20 percent of sales on marketing, advertising and PR, because Nespresso is now developing into a global brand in leaps and bounds. Country after country is being conquered, which requires high investments. "We want to become a global quality brand like Mercedes or Nike, which is already immediately recognizable worldwide by its characteristic 'N,'" says the CEO. With sponsorships such as the Alinghi yacht at the America's Cup, Nespresso achieves global media presence.
After the turn of the millennium, the company focused its energies even more intensively on the creation of the global brand. It moved into its headquarters in Paudex near Lausanne, a global competence center. Although Nespresso is part of the Nestlé Group, it is positioned as an independent company with a unique business model within the Group. More and more Nespresso boutiques are springing up on prominent streets and squares in many world cities, classy places to enjoy a fine Nespresso and at the same time focal points for marketing and sales. In 2001, the first concept machine, created by designer Antoine Cahen, was launched, functionally focused on the capsule and radically renouncing conventional coffee machine design. Since then, all Nespresso machines have been related in design and are a distinctive customer engagement tool.
Internet as a powerful platformThe attitude to life that the brand exudes is conveyed in advertising films and on the website, which is becoming increasingly important because a large proportion of capsule orders are placed electronically. The Internet has become a powerful platform. The latest commercials featuring George Clooney are also posted here, which customers can forward to friends at the click of a mouse.
Nespresso invests 60 percent of its media advertising budget in TV advertising and 40 percent in upscale print advertising. Considerable funds are flowing into the development of the global chain of boutiques; a 1500-square-meter boutique is to be opened on the Champs Elisées in Paris in the near future. The coffee machines for the colorful capsules are sold in specialty stores such as Mediamarkt, Manor and Globus. At these points of sale, Nespresso is represented with luxurious advertising. Here, as well as in the club magazines and on the Internet, customers learn about the new accessories and freshly styled machines on the market and that Nespresso does not forget the farmers in Kenya or Costa Rica and pays fair prices for first-class products. Or that it cooperates with the environmental organization Rainforest Alliance to develop sustainable concepts in coffee cultivation. Motto: Do good and talk about it.
Clooney for two more yearsThe celebrity campaign with George Clooney in 2006 was one of the most successful advertising campaigns in Europe, as Berssenbrügge points out. While several highly paid stars such as Cindy Crawford and Nicole Kidmann smile for the Swiss watch in Omega's "My choice" campaign, Clooney shoulders his Nespresso job alone.
Nespresso aims to become the "global icon for perfect coffee" by 2010, with the goal of doubling sales to two billion Swiss francs. Globally, capsules from all manufacturers account for three percent of coffee volume, but in terms of value, the figure is seven. Customers are therefore paying a high price for the quality and ease of use of the system invented by Nespresso and copied by others. Nespresso already employs 1700 people and is constantly creating new jobs in production and new boutique bars styled by French architect Francis Krempp in new markets such as Mexico City, Singapore, Shanghai, Beijing and Dubai. Says Berssenbrügge, "The boutique bar is the ambassador of the Nespresso brand and signals a new marketing strategy."
George Clooney will continue to shine as a figurehead for Nespresso for another two years. Then it will probably be time to say bye-bye, because nothing would be more counterproductive for a dynamically expanding brand than a déja vue effect.
Werner Catrina
Nestlé Nespresso, a success storyNestlé Nespresso S.A. is one of the fastest growing businesses in the Nestlé Group and the global pioneer of portioned coffee. The Nespresso concept is based on hermetically sealed, portioned coffee capsules with a rich selection of Grand Cru coffees, the specially designed and easy-to-use coffee machines, and the Nespresso Club with its personalized service. Furthermore, Nespresso offers a range of portioned coffees, machines and services tailored mainly to the needs of upscale restaurants, hotels and cafes, catering companies, customer care and exclusive retail outlets, care of first class passengers in airlines.
Nestlé Nespresso S.A. is headquartered in Paudex/Lausanne, employs more than 1700 people at the end of 2006, sells its products to end consumers in more than 50 countries and currently operates 79 exclusive boutiques in world cities. In 2006, the company achieved a growth rate of 42 percent and sales of CHF 1.16 billion.
