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Why Nespresso is the Next iTunes

November 13, 2010, 8:09 AM

Nespresso Boutique SoHo
When you look at how Apple completely disrupted the music industry with the introduction of the iTunes digital music store back in 2001, it's natural to ask: Which other companies or brands are capable of such wide-scale disruption? My current pick is Nespresso - and not just because I recently purchased a super-cool Nespresso Essenza espresso machine at Crate & Barrel.

Look at the structural characteristics of Apple iTunes -- and it's easy to see why Nespresso is on its way to becoming the next iTunes. Apple fundamentally created a "closed" system in which digital songs would only play on Apple devices (just try to transfer songs into or out of iTunes!); radically changed the way we think about buying music (a la carte, 1-song-at-a-time for $0.99); and created a "boutique" experience around the product ecosystem (the Apple stores with their Genius Bars and live events). On top of all that, Apple overlaid the impossible-to-define "hipness" quotient over the entire music experience.

Nespresso Now, compare that to what Nespresso is on its way to replicating within the coffee industry. First of all, Nespresso has created a "closed" system where special Nespresso capsules are required to brew espresso - and these are only available online via Nespresso or at one of a handful of boutique stores in America. These capsules are not usable in any other coffee machine. Secondly, Nespresso has absolutely crushed it when it comes to the single-serve coffee market. Each capsule brews one cup at a time, and that's it. You buy little boxes of capsules on an a la carte basis. Thirdly, there's the growing network of Nespresso boutiques (two in New York City, one in Chicago, and several more planned around the U.S.), where Europhiles cluster around to drink really expensive espresso and then shop upstairs in a minimalistically elegant area. Finally, there's the whole Nespresso branding campaign that is centered around creating a new "coffee culture," complete with its own language and lingo ("grands crus" for coffee, anyone?).

Now, if you'll excuse me, I'm off to brew a capsule of Arpeggio.

 

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