Switzerland is adding another factory for Nespresso, Europe's largest single-serve coffee brand. This is to manufacture capsules uniquely designed for the U.S. consumers where sales growth is bigger than its home continent according to Bloomberg.
Nespresso is owned by the world's largest food maker Nestlé SA shows "high double-digit" growth in America outperforming the high single-digit growth in Europe, said Nespresso Chairman Patrice Bula said in an interview in Romont, Switzerland. The interview was done during the coffeemaker's inauguration for its third production center which was held Thursday.
"The U.S. expansion is going very well," Bula said. "We have the growth we planned to have in Europe. Of course you have much more competition, and, of course, it's a more mature market."
Last year, Nespresso introduced VertuoLine, an 8 oz. serving coffee machine to the $5 billion North American single-serve market to appeal to their preference for larger cups of coffee. The Romont factory will solely produce pods for VertuoLine, Bula said. Nestle is shelling out 300 million francs ($308 million) on the Romont factory and already invested 1.1 billion francs to raising Nespresso production in Switzerland since 2002.
The third Nespresso plant will be situated in a grassy valley between Switzerland's Lakes Geneva and Neuchatel. Nestlé refused to comment on maximum output and whether the site would eventually operate at full capacity according to Reuters.
VertuoLine has aided U.S. sales increase since it could make big mugs of coffee told Nestlé Chief Executive Officer Paul Bulcke in an interview. The coffee chain has more than 400 boutiques across the globe, of which 36 are based in the U.S.
"The strong franc is only one challenge on the list, Bulcke said. "What is more worrying are the constant changes in (legislative) framework conditions." He also added that all three Nespresso plants are situated in Switzerland and Nestlé conducts two-thirds of its research and development in the country.
But immigration curbs could make it difficult for Switzerland to maintain its competitiveness and allow Nestle to continue to employ the one hundred nationalities represented in its headquarters, Bulcke said.
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