The Nespresso effect

By THIS IS MONEY
Updated: 04:53 EST, 23 April 2010

The Daily Mail City team explains why a new method of brewing coffee has boosted Nestle's Nespresso sales by 35% in Britain.

Sounds italian?

It's Swiss actually and all about posh coffee.

Geneva-based Nestle has devised an innovative way to shift its coffee through expensive designer capsules.

It said yesterday robust demand has helped boost first quarter sales.

Its Nespresso business grew by 35.5% in Britain during 2009. The food giant announced plans to set up a customer service centre in York creating 73 new jobs.

How does it work?

Only special machines are able to dispense Nestle's capsules. Connoisseurs of caffeine can buy the machines through retailers.

However, customers have to register online to buy the capsules to brew coffee-shop style cappuccinos and espressos.

Nestle bills this as an exclusive club, but the reality is it is a way for Nestle to collect data on all its customers and market to them.

What's the effect of all this then?

The Kitkat and Aero maker said underlying group sales were up by 6.5% in the first three months of the year to £16bn.

Its Nescafe sales were up by 20%, boosted by Nespresso's success.

The coffee spin-off's ads are fronted by Hollywood A-lister George Clooney.