Nestlé, the world’s largest coffee company, has launched a Nespresso boutique in Delhi’s Nexus CityWalk mall, targeting India’s affluent consumers. The boutique offers Nespresso coffee machines, priced from ₹16,500, and coffee pods.
“This is the start of us tapping into a thriving coffee culture here in India. Young consumers are exposed to coffee through different trends on social media, but also coffee shops that open up. This was not a reality 15-20 years ago. Obviously they expect that from brands like ours too, and they also want to be able to replicate those at home,” said Philipp Navratil, CEO of Nespresso, speaking to media in the capital on Thursday.
Nespresso and Nestlé India have appointed Thakral Innovations Pvt Ltd as their official distribution partner in India that will cover the full range of Nespresso coffee products across all channels. Headquartered in Vevey, Switzerland, Nespresso operates in 93 markets via a global retail network of 791 boutiques as of 2023.
More stores will come up in Mumbai and other top metros, according to the company. Nespresso coffee is priced at a premium to regular instant coffee and lets consumers make cafe-style coffee at home. Consumers can use Nespresso pods—most of which use high-end Arabica coffee beans—to make their coffee.
Beyond the machine itself, Nespresso pods in India are priced at ₹95 per single-serve capsule, sold in packs of ten or more. This contrasts sharply with Nestlé’s instant coffee sachets, which retail for as little as ₹5.
Navratil who was appointed as CEO of Nespresso last year said the brand also has a strong business-to-business vertical that serves hotels, offices and corporate lounges etc. The vertical has become a big-growth driver globally.
“There are a lot of opportunities in hotels, five-star hotels, business lounges in hotels—given the number of hotels here. I’m convinced that in the long run this is going to be a large market for Nespresso,” he added.
Cafe culture
India’s cafe culture has flourished over the past decade, with established chains like Cafe Coffee Day joined by international and domestic specialty coffee brands such as Starbucks, Tim Hortons, Blue Tokai, and Third Wave. This growth aligns with the India coffee chain market’s projected 8.1% CAGR from 2024 to 2033, with market size expected to rise to $323.8 million from $160.6 million.
Navratil, however, refrained from providing specific growth projections for Nespresso in India, citing the market’s “white space” potential.
“With the establishment of Nespresso in India—we are helping grow the coffee category as a whole, we will premuimize the category. In India, it’s still a penetration game and convincing more and more households to drink coffee,” he added.
India is one of the very fast growing coffee markets for the company.
Nescafe, for instance, has introduced its coffee to over 30 million Indian households in the past seven years expanding household penetration, according to the company’s annual reports. India is among the top 20 coffee markets for Nestle globally.
In the December quarter, Nestle India’s powdered and liquid beverages business (including coffee) was the largest growth contributor to the company’s quarterly revenues, clocking in a high double-digit growth. Total sales were up 3.9% to ₹4,762.1 crore during the quarter. It sells coffee brands such as Nescafe Classic, Sunrise and Nescafe Gold.
Nestle is the world’s largest coffee company—the category makes up over a quarter of Nestlé’s global sales.
