Nespresso’s global retail value may have grown exponentially in the past few years, with capsule sales well over $3.4bn, but that was not always the case for the market leader. What most people are not aware of is that it took Nespresso over 30 years to get to where they are today.
The story started off in the early 70s, with a simple aim by Nestlé R&D: to allow anyone to create the perfect cup of espresso coffee, the same way they would if they were drinking coffee made by a skilled barista at a restaurant. Nestlé wanted to deliver premium coffee that was easy to make without requiring the consumer to use complicated equipment.
Initially, Nespresso was only targeting offices until 1986, when Yannick Lang was hired to head the company. Yannick realized that consumers between the ages of 35 and 45 would enjoy drinking restaurant-quality espresso at home and wanted to tap into that market. Nestlé was hesitant to do so.
Finally, in 1989 Yannick was able to persuade the company to target households in Switzerland. The initial market tests did not look good but he felt that disruptive innovations were initially slow to adopt. Yannick remained persistent and it wasn’t until 1995 that Nespresso managed to break even prior to becoming one of Nestlé’s fastest growing business units with the help of his distribution strategy.
Nespresso became popular and the small targeted market eventually expanded, and continues to expand rapidly. Nespresso was ahead of any competitors, and it took them over 2 decades to become the major brand Nespresso is today.
Nespresso’s story is one that proves that intrapreneurships can be successful and that being passionate and persistent while taking a huge risk can pay off at the end of the day, no matter how long it takes.
