Strategic management Nespresso

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The Moroccan market remains mainly a tea market. However, more and more Moroccans are fans of coffee, "says Manuel Sancho, Nespresso Middle East, Africa and Caribbean Business Development Manager. The annual growth of the local market is estimated around 4 to 5%. In number of cups, Moroccans consume around 20.3 cups of coffee / year / inhabitant.

Taxed as being an elitist in its distribution strategy, Nespresso management denies it: "I don't think we are an elitist. Selective distribution is a choice we made because we wanted to have direct contact with the consumer, in particular to find out about consumption habits, develop new products and services in line with demand.”

Concretely, consumers want to bring their used capsules back to the point of sale. The same packaging will then be transferred to Suez. The first Nespresso recycling system was implemented in 1991 in Switzerland. 26 years later, the company launched a local platform in partnership with Suez, and the association Terre et humanisme, for the development of coffee grounds as fertilizers and their distribution to farmers.

“We don't necessarily set targets in tonnage, but rather as a percentage of the capsules sold. If, during the first year, we reach 10% of capsules sold recycled, this will already be a very good start,” explains the manager. The goal for the brand is to implement a recycling system in all the countries where it operates, by 2020.

For the company, the Moroccan market a particularity. Private consumers or households represent more or less 60% of turnover. Then come the professionals, who support 40%. The professional segment occupies an important place in the strategy, especially hotels, restaurants and cafes (CHR). Next are the offices. But the brand does not communicate on what the Moroccan market represents in terms of turnover or volume of consumption. "These figures are confidential".

On the coffee market in general, Nestlé Maroc benefits from the marketing of its flagship brand of standard instant coffee, Nescafé, available in different formats. The company also benefited from a high value share of 66% in the instant coffee category in 2016. Nescafé held the first place in the coffee market with a share of 32%, Kraft Foods Inc was in second position with a 23% share in value. For capsule coffee, the major brands sold almost 35 million units, 80% of which by Lavazza and Nespresso, in 2015.

Nescafé’s strategy is based on in-store promotion campaigns in most distribution channels, supermarkets, hypermarkets and convenience stores. This is not the case for Nespresso, which is more selective in the mode of distribution of its capsules and ranges of accessories (cups, glasses, capsule dispensers and capsule displays).

Manuel Sancho , Business Development Manager of Nespresso Africa Interview 
The world leader in coffee, Nespresso, continues its development in the Kingdom. Innovation, launch of new products on the Moroccan market, opening of new stores. Manuel Sancho, Business Development Manager of Nespresso for the Middle East, and Africa details the brand's development strategy on the Moroccan market.[pic 2]

1-The Nespresso brand has been present in Morocco for several years. So how many cities in the Kingdom do you currently have shops in?

Manuel Sancho: Today we have shops in six cities, including Casablanca and Marrakech, but also in Rabat, Fez, Tangier and Agadir. However, we are present throughout the Kingdom since customers can also order by internet or through our call center. We will strengthen our presence in the coming years in cities like Casablanca and Rabat. It is clear that we have an expansion plan, but at the moment we are taking our time. We are constantly evaluating the number of customers we have per city, and it is the critical size of a certain number of customers in a city that determines the establishment of a shop there. In Casablanca, for example, we have only one boutique, but we also have a point of sale in the Maroc Mall. This is why we are constantly looking for opportunities to increase the number of points of sale.

2-Competition in the capsule market has become very tough today. How do you manage to get by on the Moroccan market?

Competition is not only complicated in Morocco, it is complicated in all markets. But, this is part of the life of any business. Competition has positive sides besides. The first point is that it allows the consumer to have several choices. The second positive point is that it allows companies like ours to find innovations to surprise our customers, to do better to meet their expectations. One of the reasons why the consumer stays with us rather than going to the competition is necessarily the quality of our products, which is the result of the scrupulous selection of the coffee producing regions, as well as the coffee growers with whom we collaborate. That is to say, how we select the great coffees, and also the way in which we transport all green coffee to Switzerland for quality control, roasting and production. All this know-how is dedicated to the creation of the 24 exceptional grands crus of our range, coming from very diverse origins around the world and responding to the diverse tastes of our customers. All of these points are very difficult to copy. Likewise, the standard of our service is very difficult to copy too. Today, as a Nespresso consumer, you can find our products in stores, but you can also order online 24/24 or order via a call center where coffee specialists are trained to answer any type of question coming from consumers. There is also the possibility of having it delivered to your home or workplace. This is a set of services which are made available to our customers and which allow us to be competitive compared to the competition. Once again, I think competition is healthy for any business.

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