By Ma. Stella F. Arnaldo / Special to the BusinessMirror
FILIPINOS are one of the largest per-capita consumers of coffee in the world, which makes the country ideal for selling Nespresso machines.
In an interview with the BusinessMirror at the launch of the Vertuo line of machines and coffee capsules, Patrick Pesengco, Managing Director of Novateur Coffee Concepts Inc. said, “We have 41,000-plus very active Nespresso club members in the Philippines, between the people who buy the machines and capsules. But definitely there are thousands [of units] that we’ve been selling. So it’s been growing, especially during the pandemic, because people want to have good coffee at home. So we’ve been growing double digits.”
Nespresso is a company founded by the Nestle Group of Switzerland in 1986, selling the world’s first portioned coffee system.
While most of their sales were boosted via e-commerce during the pandemic, he noted that as alert levels dropped, “when people started going out, our store sales went up,” while online sales have slowed.
Novateur, a wholly-owned subsidiary of the Philippine Vending Corp., is the exclusive distributor of Nespresso in the Philippines.
The Vertuo uses Nespresso’s patented “centrifusion” technology, which infuses water into the coffee grounds in each spinning capsule at the touch of a button, extracting a more flavorful cup of coffee.
The reopening of restaurants after the pandemic, along with the hotel and resort sector, have also boosted the sales of Nespresso units and capsules in the country. “When the market opened up, there was an increase in sales to restaurants and hotels,” said Pesengco, citing the Peninsula Manila, Shangri-La group, Radisson Blu, Marco Polo, and Amanpulo among the company’s clients. “For them, Nespresso is synonymous with good coffee, which a hotel guest can dispense consistently.”
While he declined to reveal their sales and revenue targets for 2023, Pesengco said, overall, “we’re targeting 1.5 million to 1.8 million households in the Philippines. So, it’s still a long way to go,” using the 41,000 active club members as a comparison.
He noted, “Filipinos are one of the biggest per capita coffee consumers in the world, it just happens majority [drink] instant coffee for now.” In Asia, the Philippines is second to Japan as the largest coffee consumers in the region.
Data compiled by Coffee Affection suggest that 90 percent of Philippine households have coffee in their cupboards, with 80 percent of Filipino adults drinking an average of 2.5 cups per day, preferring a 3-in-1 mix combining coffee, creamer, and sugar. Statista also reported that Filipinos spent an average of $44 per person on instant coffee in 2022.
Despite the growing number of coffee farms in the last few years, most of the locally-consumed coffee is still imported, reaching some 38,000 metric tons in 2021, as per the Philippine Statistics Authority.
Currently, there are five Nespresso boutiques in the country, four of which are in Metro Manila, and one in Cebu. There are also six pop-up stores around Metro Manila. But more physical stores are coming soon, Pesengco stressed: “There is definitely a clamor for more brick-and-mortar stores, especially since buying behaviors are triggered by product experience. Having a physical store allows for that experience, which helps our customers decide which Nespresso machine would work best for them. We definitely have plans to further expand in the next few years, especially outside Metro Manila.
Meanwhile, we deliver nationwide for orders via our web site (www.nespresso.ph).”