United Coffee launch of single serve premium espresso might be confusing...

by Chee Leng
(Singapore)

United coffee the largest independent coffee company in Europe is at least joining the fastest growing coffee segment -the single serve coffee segment.

The single serve coffee segment has been growing at more than 30% year on year and it is especially popular in Europe largely due to the advert run by Nespresso.

And United Coffee with customers such as Tesco, Waitrose, Mercadona, Lidl, Carrefour can look forward to a wide distribution channel that should give them good sales.

Its out of home (food services) market is big too with customers such as Macdonalds.

This single serve premium espresso system positioning seems to target another big player -Nespresso.

It has 19 bars (it is touted as an espresso maker, so pressure is an important variable), designed by Swiss engineers, it even has a milk foaming machine.

United coffee premium espresso capsule system is good, but the fact is so are the many other models out there. To break into the market, they need to identify a niche and capitalized on it.

Keurig did it with their variety, Nespresso has theirs with their focus on coffee. This are currently two big players in the single serve coffee market, and no one can deny that they have captured huge chunk of mind share (other than market share).

So, what is United coffee marketing plan?

From the report, it seems that they want to go everywhere. They are planning a launch with their retailers and they are launching with their out of home partners as well.

This might be counter-productive. Here is a scenario: Would you want to pay even $0.50 more for in a cafe, especially one that you can buy at a discount in a Supermarket.

Choosing of distribution ensures the right positioning for the product.

If United coffee in pursuit for higher penetration rate, decides to go to all its outlets, it might enjoy short term success, but in long term, it would dilute its brand equity.

It might become just another single serve coffee maker.

If this is just another source of income for United coffee, then going big is good. But, if they are looking forward to build this into one of their key product, then they should take note of their positioning.

I am really giving more than my $0.02 in this United Coffee plan because this is very similar to a coffee product that I promoted many years ago.

My decision to pursue multiple channels achieve short term gains(I used to work with the World Largest roaster), but did not manage to penetrate any channels at all.


Anyway, that is my $0.025.