Summary of our market study

French coffee pod market estimated at €1.5 billion

The global market for coffee pods has experienced robust growth and is expected to grow at a CAGR of over 6%. Market size is expected to reach US$21.07 billion by 2025.

The market is dominated by a few key players, including Nespresso, JDE (with brands such as Tassimo and Senseo) and Lavazza.

The French pod market accounted for 48% of total coffee sales. The ubiquity of coffee machines using pods or capsules in French households, which accounted for 54% of machines, further underlines this trend.

However, the sector also faces environmental concerns due to the low recycling rate of coffee pods, with only one in five Nespresso capsules being recycled.

Explosion in pod consumption

French consumers are increasingly making this form of coffee consumption part of their daily routine, and are turning to pods.

One study revealed that a typical French consumer drinks between 1 and 5 cups of coffee a day. The 25-34 age group is the most attracted to coffee pods (around 73% of this group). More than half of French households have coffee machines equipped with pods or capsules.

Key players in the pod and capsule coffee market

  • Nespresso, Nestlé's creation
  • Lavazza, a name synonymous with rich espresso experience.
  • Jacobs Douwe Egberts with Senseo and Tassimo.
  • Malongo, a smaller player
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Summary and extracts

1 Market summary

1.1 Definition and scope of the study

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.).

1.2 Strong growth in the global market

Coffee pod & capsule market World, ****-****, in $US billion Source: ****

The global coffee pod market is in full bloom; between **** and **** the market is expected to grow at a CAGR of *.**% to reach $US **.** billion in ****. 

This growth stems from several reasons, including a more diverse and higher-quality offer which continues ...

1.3 Domestic market

Coffee & similar beverages

Market size processing of coffee and the (***) France, ****-*****, in € million Source: ****

The market for processing coffee and tea (***) amounted to €*.** billion in ****. Between **** and ****, the market shrunk with *.*%.

This comes as competition from external players has pressured margins in France. 

Coffee Pods

In France in ****, €*.* billion of ...

2 Demand analysis

2.1 Profile analysis: the French coffee consumer

France has been undergoing a shift in consumption of coffee, from traditional ways of consumption (***) towards pods and capsules. In ****, **.*% of coffee consumed was through coffee pods, a segment which is growing in light of the convenicence it brings together with an innovative offer with different features of taste. [***] Below, we ...

2.2 Focus: pods

Coffee pods are a very popular means of consuming coffee. According to IFOP, coffee pods made up the largest overall consumption category of coffee in ****, being integrated in **% of cases when coffee was consumed. In particular, the Grand-Est region are avid coffee pod users, and overall the most typical consumer is ...

2.3 Demand trends

Indeed, the trend of using pods has come to prevail in the French coffee market, and even reap market share from other coffee consumption methods. Customers are catching on to product offering trends related to coffee: according to IFOP **% of French consumers were susceptible to coffee pods as an emerging trend ...

3 Market structure

3.1 Market overview

Companies and employees in the tea and coffee processing sector (***) France, ****-****, in units Source: ****

The graph above shows the evolution in the number of employees and companies in the coffee-and tea processing industry (***). Although this scope covers more than coffee pods only, it still provides a good proxy on what ...

3.2 Production is everywhere but in the Western World

The coffee production process consists of * key steps:

Harvesting

The harvest consists of harvesting the ripe fruits of the coffee tree, commonly known as cherries for their orange-red colour. Harvesting periods can last several months. On average, it is estimated that one coffee tree produces *.*kg of coffee cherries per year, ...

3.3 Distribution of coffee pods dominated by a handful of brands

Distribution of sales of coffee pods in super-and hypermarkets France, ****, in % Source: ****

In ****, almost **% of super-and hypermarket sales in France pertained to Jacob Douwe Egberts. The group includes brands such as L'Or, Senseo and Tassimo. JDE dominates the sales of this type of coffee pods. 

In second place we find Lavazza, ...

4 Analysis of the offer

4.1 Product Overview

Overview

There are two main varieties of coffee beans: Arabica which grows at high altitudes (***) and which is the most cultivated, and Robusta which grows at a lower altitude, and is more concentrated in caffeine. In particular, Arabica beans' caffeine content is *.*% whilst Robusta's is *.*%. [***]

Globally, Arabica accounted for around **% of ...

4.2 Price analysis

Source: ****

4.3 The environmental issue with capsules

Carbon footprint

Coffee pods are practical in the sense that they ensure storage and an appropriate dosage for consumption of a cup of coffee. However, coffee capsules are often made out of plastic, or a hybrid between aluminium and plastic. This, in combination with the fact that recylcing rates are low, ...

5 Rules and regulations

5.1 Regulation

There are international standards to coffee production, trade and consumption. The International Coffee Agreement, concluded between the ** members of the International Coffee Council in **** and entered into force in ****, aims to promote international cooperation on the coffee market in order to develop a sustainable coffee economy and promote the quality and ...

6 Positioning of the actors

6.1 Segmentation

  • Nespresso (Nestlé)
  • Lavazza Groupe
  • JDE Jacobs Douwe Egberts (JAB Holding)
  • Malongo, Cie Mediterranéenne des Cafés
  • Café Royal (Delica AG)
  • Ethical Coffee Company
  • illy Café
  • Segafredo Zanetti (Massimo Zanetti Beverage Group)
  • Pellini Caffè
  • Carte Noire (Jacobs Douwe Egberts)
  • Café Grand Mère (Jacobs Douwe Egberts)
  • Maison du Café (Jacobs Douwe Egberts)
  • Gimoka
  • Caffè Borbone
  • Maison Lagrange

List of charts presented in this market study

  • Coffee pods and capsules market
  • Taille du marché de la transformation du café et du thé (NAF 10.83Z)
  • Consommation quotidienne de café
  • Part de marché, ventes de café et de thé dans les super et hypermarchés
  • Proportion des ménages équipés de machines à café
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Latest news

Pietro Mazzà takes over as General Manager of Lavazza France and Carte Noire - 22/02/2024
  • -Founding year: 1895 in Turin
  • - Company sales: 2.7 billion euros
  • - Number of employees: 5,500 - Number of production plants: 8
  • - Number of countries where the company has production plants: 5
Nespresso wants to make its coffee pods greener - 05/01/2024
  • Thirty-seven years ago, Nestlé launched the Nespresso concept.
  • The Swiss giant dominates the world of small coffee pods.
  • Last year, the market approached the 4 billion euro mark in France, up 10% year-on-year and even 17% by 2021.
  • New competitors, such as Switzerland's Migros with its Café royal brand, and the rise of bean-to-cup machines,
  • Nespresso has invested in a pilot line of compostable paper capsules. In Switzerland, the rate of recycled capsules is already approaching 70%.
  • For the moment, these compostables are only available in France and Switzerland
Nespresso steps up its support for Café Joyeux - 30/11/2023
  • Café Joyeux has managed to grow at an unhoped-for rate since its launch 6 years ago, while its team members with mental and cognitive disabilities, in particular Down's syndrome or autism spectrum, will number nearly 170 by the end of the year
  • Nespresso' s support acts as a gas pedal for this not-for-profit company
  • Café Joyeux employs 300 people, not counting volunteers.
  • It is present in 17 locations, including three outside France, in Belgium and Portugal.
  • The next openings are scheduled for Saint-Philippe-du-Roule in Paris in January, followed by Marseille, Strasbourg and Angers. s the fight against food insecurity
  • Café Joueux has installed its own-brand coffee references at Carrefour, on the shelves of some 800 convenience stores and 36 hypermarkets.

JDE Peet's, Café: historic turn for the owner of L'Or, Senseo and Jacques Vabre - 27/11/2023
  • The Reimann family is the owner of JAB Holding, which has spent
    • Perfumer Coty
    • the Pret A Manger sandwich chain
    • JDE Peet's, the world's second-largest coffee company behind Nestlé, with brands such as L'Or, Senseo and Jacques Vabre
    • Reckitt Benckiser (Woolite, Calgon, Durex)
    • Panera Brands in the coffee and bakery sector, with 140,000 employees and sales of 4.8 billion dollars (American chains Caribou Coffee and Panera Bread)
    • Pet clinics and veterinary practices, with Ethos and NVA, two companies with revenues of $2 and $4 billion respectively.
  • JAB's business model consists of identifying a sector with high consolidation potential, acquiring players in the field, merging them and taking them public.
  • JAB's coffee strategy: in the space of eight years, JAB acquired Peet's, a premium coffee roasting and distribution chain, the Dutch Douwe Egberts and the German Jacobs, and in 2015 the assets of Mondelez International. The group includes some fifty coffee and tea brands and is listed on the stock exchange. The holding company still owns 59%.
  • In 2021, JAB takes US doughnut chain Krispy Kreme public
  • In 2019, JAB buys pet clinics, investing 5 billion. In France, the group bought HD Assurances and CaptainVet.
  • In 2015, Coty's takeover of Procter & Gamble's beauty products turned into a disaster.
Malongo relocates its percolators to Vendée - 12/10/2023
  • Sales 2022: 120 million euros
  • Number of employees: 400
Malongo doubles up in Vendée - 01/07/2023
  • The Malongo Group, a long-standing player in the fair trade coffee market, plans to build a 3,500 m2 plant in La Roche-sur-Yon (Vendée) in the first quarter of 2025.
  • The investment is around 3.5 million euros
  • Current production is 60,000 units a year, but this is set to rise to 400,000 units a year within three years.
  • Malongo has sales of 120 million euros.
  • Malongo employs 400 people.
  • Malongo's espresso machines are distributed one-third in hotels and restaurants, one-third in supermarkets (1,000 points of sale) and one-third for export.

Companies quoted in this study

This study contains a complete overview of the companies in the market, with the latest figures and news for each company. :

Nespresso (Nestlé)
Lavazza Groupe
JDE Jacobs Douwe Egberts (JAB Holding)
Malongo, Cie Mediterranéenne des Cafés
Café Royal (Delica AG)
Ethical Coffee Company
illy Café
Segafredo Zanetti (Massimo Zanetti Beverage Group)
Pellini Caffè
Carte Noire (Jacobs Douwe Egberts)
Café Grand Mère (Jacobs Douwe Egberts)
Maison du Café (Jacobs Douwe Egberts)

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