The coffee pods market in France

The coffee in pods or encapsulated coffee, is a way of packaging the coffee in individual packaging (capsule or soft pod), for quick use in a suitable coffee machine. These products have been marketed since 1970 thanks to the invention of Nespresso, while other companies have gradually followed this trend: Illycaffè in 1972, Lavazza in 1989 and Senseo in 2001.

There are three main types of coffee pods, which compete with other main types of coffee such as ground coffee and soluble coffee [handpresso]:

The "soft pods" which allow a "filter" quality rendering marketed adapted to the Philips Senseo machine

The "hard pods" that allow an "espresso" rendering

The "capsules" which also allow an "espresso" rendering but which are adapted to Nespresso, Agga or Iperexpresso machines

The global market is in full growth. Between 2017 and 2025 it is expected to expand at a CAGR of over 6%. Globally, coffee pods have become more appealing as consumers seek to reproduce coffee at home. Parallel to this, suppliers are continuously diversifying their offer and increasing the quality, which helps continue the product and market to evolve. Coffee production occurs exclusively outside the Western World, but consumption is the highest in Europe. Finland tops the list of per capita consumption with 12 kilograms of coffee per person per year on average.

In France, the market has been growing rapidly as well, owning to an extended offer and consumer willingnness to bring high quality coffee to their homes. Moreover, personalization has become a trend, which producers are receptive to, thus creating products which accustom all types of customers.

In France, and globally, the main brands of coffee pods include Nespresso, Senseo, Malongo and Tassimo. Carte Noire, L'Or Espresso and Café Royal are also prominent brands. All these players offer coffee pods, but on top of that a coffee machine belonging to the same brand is also present. The players in the coffee pod market are relying on a move upmarket and continuous innovation in order to sustain their growth. The 2 main issues in the coffee pod market seem to be linked to Nespresso's obligation to remove barriers to entry for other manufacturers, as well as the recycling of used capsules. (bakery, biscuit factory, etc.).