Fresh Ground Coffee Pods: Niche or Mainstay?

Strategy Briefing

About This Report

Jul 2013

Fresh ground coffee pods experienced extensive growth between 2007 and 2012. The combination of convenience and quality afforded by pods makes them a value-added product with a premium positioning. As such, pod penetration is almost exclusively limited to the higher income regions of Western Europe and North America. In this new report, Euromonitor International examines opportunities in this dynamic category, which has the potential to attract fresh and instant coffee drinkers alike.

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Fresh Ground Coffee Pods: Niche or Mainstay?

Value growth surges since 2007

Between 2007 and 2012, the value growth of fresh ground coffee pods dramatically exceeded every other type of coffee. Despite relatively limited geographical penetration, the premium price tag of pods has enabled the category to have a substantial impact on the value of the entire coffee industry.

Concentrated in developed markets

Consumption of fresh ground coffee pods remains confined to higher income regions where fresh coffee is the dominant format. In 2012, Western Europe and North America accounted for over 90% of pod volume and value.

Consolidated among top brands

Still a relatively new industry, the pod market is heavily consolidated among the top four manufacturers. Nevertheless, as the market expands, leading players are beginning to lose share to newer companies.

2012: The year the patents expired

The top brands, Nespresso and Keurig, saw several of their key patents expire in 2012. These expirations could lead to a boom in competing pod brands, particularly in Western Europe.

Emerging markets are difficult to penetrate

The high price tag of pods makes penetration difficult in lower income regions. However, the single-serving format of pods, which provides a bridge from instant coffee to fresh, is appealing to consumers in emerging markets. Pods will achieve great success among these budding coffee drinkers by focusing on a more economical positioning and a wider selection of flavours.

What this report includes

  • Top-level strategic analysis of how major consumer trends will influence global markets
  • Consumer insight
  • Impact across all relevant consumer markets
  • Unique graphics and case studies
  • Key market snapshots
  • Accompanying presentation to synthesise main findings

Why buy this report

  • Identify factors driving change now and in the future
  • Understand motivation
  • Forward-looking outlook
  • Briefings and presentation should provoke lively discussion at senior level
  • Take a step back from micro trends
  • Get up to date estimates and comment


Key findings

Global Market Performance

Fresh ground coffee pods sales reach US$8 billion in 2012
Convenience and quality comes at a premium
Pod market is geographically concentrated
Value growth outpaces volume growth
Greater competition will drive down prices
Pod format has yet to affect beverages other than coffee
Global performance highlights 2012

Regional Performance

Americas drive overall coffee retail growth
Coffee preferences vary greatly by region
Top 10 pod markets
Leading markets differ greatly
Western Europeans are earliest adopters
Southern Europe drives growth
Country spotlight: France
North America is the fastest growing region
Opportunities in Latin America
Regional run-down

Competitive Analysis

Consolidated among top five brands
Green Mountain Coffee Roasters leads value growth
Nespresso maintains widest global presence
Company spotlight: Green Mountain Coffee Roasters
Brand spotlight: Nespresso
Nespresso system versus GMCR K-cup system
Mondelez targets Nespresso’s market
Private label pod expansion
Brand spotlight: Nescafé Dolce Gusto
Brand spotlight: Nescafé Dolce Gusto
Competitive wrap-up

Prospects and Opportunities

Growth will begin to taper
Market will remain concentrated
Pod potential in instant coffee markets
Fresh coffee for instant occasions