Analyst Insight by Lorenza Della Santa - Senior Analyst, Consumer Appliances
Looking to boost their profitability, almost all appliance companies in Western Europe are seeking ways to tap into the premium small appliances category, even those companies which have never produced such products before. With air conditioners largely out of reach, mainly due to the predominance of Asian and Turkish players, manufacturers have been forced to look elsewhere, especially when considering that air conditioner volumes in 2013 have reached just two-thirds the level of sales seen back in 2008. Hot on the heels of the phenomenal success of Nespresso, manufacturers appear to have all focused on the pod coffee business, with differing rates of success.
Does investing in pod coffee machines still make sense for those which have not done so already? Indeed, the coffee machine category has experienced a boom in recent years, with value sales driven by so-called closed brewing systems such as Nespresso in Europe and K-Cup from Keurig in North America. However, while in North America high volumes and premiumisation are set to drive pod coffee machine value sales up by 64% over 2013-2018, in Western Europe the situation will be quite different.