In the Age of Specialty Coffee, Do People Still Drink Capsule Coffee? Of Course!

The Rise of Coffee Capsules: A Modern Coffee Revolution

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Today, coffee has gradually become a mainstream beverage, visible everywhere from libraries to offices. The act of drinking coffee has also become increasingly convenient. Besides drip bags and instant coffee, coffee capsules have emerged as a symbol of speed and convenience.

Additionally, affected by the pandemic, the operating conditions of physical coffee shops have been impacted to varying degrees, leading to a significant increase in the sales of coffee capsule machines and capsules. According to global market research and consulting firm Future Market Insights (FMI), the global coffee capsule market is expected to exceed $9.8 billion (approximately 65.6 billion RMB) by the end of 2032.

Coffee capsules are a type of pre-packaged coffee where coffee beans are ground into powder and sealed in special plastic or aluminum foil capsules. When ready to drink, the capsule is placed into a dedicated coffee machine for quick extraction. Due to their superior quality and convenience, they occupy an important position in the coffee consumption market. Coffee capsules were first invented in 1976 by Mr. Eric Favre, who was then working at Nestlé's Swiss headquarters.

Market Leaders and Emerging Competitors

When it comes to coffee capsules, most people immediately think of Nestlé's Nespresso capsules. Indeed, Nespresso currently holds the highest market share in China's coffee capsule market. However, after Nestlé, coffee brands such as Starbucks, illy, Sumida River, and JDE Peet's have all entered the coffee capsule market.

Coffee giant Starbucks recognized the potential of the coffee capsule market early on, forming a global coffee alliance with Nestlé and focusing on the Chinese market. They launched a new "Starbucks At-Home Coffee" product series for Chinese consumers and brought it to market with remarkable speed. According to reports, among the 21 new "Starbucks At-Home Coffee" products launched through this collaboration, 15 are capsule coffee products.

JDE Peet's first contacted coffee capsules in 2016, and since then, the brand has continuously experimented with launching coffee capsules. In 2020, JDE Peet's announced that the group would invest 110 million euros (approximately 866 million RMB) to expand global coffee capsule production lines, showing that JDE Peet's is very optimistic about the development prospects of China's coffee capsule market.

The Appeal of Coffee Capsules

The continuous investment in coffee capsules by coffee brands indicates that competition in the coffee capsule market continues. With technological advancements, premium instant coffee, represented by coffee capsules, has begun to win over consumers. Capsule coffee, made by sealing ground and roasted coffee powder in special capsules, offers unique flavors and consistent quality. Combined with the brewing process of capsule machines, it makes brewing simple and fast.

The main reason for the popularity and rapid development of coffee capsules is their excellent value for money. Compared to a cup of coffee from certain coffee shop brands costing around 30-40 RMB, a cup of capsule coffee costs only 4-6 RMB on average. Today's capsule coffee machines have also been continuously upgraded to support one-touch operation, allowing you to enjoy a cup of flavorful coffee in about 30 seconds on average. There are also many flavor choices to meet the preferences of different users.

Environmental Concerns and Future Outlook

However, the special preparation process and packaging materials of coffee capsules have brought some safety concerns while providing convenience. Improper disposal of used capsule shells poses significant challenges to environmental protection. But packaging is also continuously upgrading. Recently, Nestlé announced the launch of paper-shell capsules for the first time, although when they will be widely available in the market remains unknown.

Given the current market conditions, coffee capsules still have certain consumer demand. How to maximize the characteristics of capsule coffee while continuously expanding under the premise of ensuring safety and environmental friendliness is a question worth considering.

Image source: Internet

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