Nespresso – What Else?

A beautiful thing about Paris, for a coffee addict, is the number of cafes and bars across the city. There are on every street corner, and they usually serve crêpes. Crêpes and coffee are a perfect combo, if you ask me.

Despite the number of coffee shops, the French are obsessed with Nespresso. Nespresso is Nestle’s entry into coffee brewing systems. They sell specialized machines, plastic coffee cartridges, and other accessories. There are a few stores in Paris, and the lines for the cartridges are insane.

The Nespresso system is really based around espresso, which is a more “european” style of coffee. But I’m sure their machines and cartridges could be easily adjusted for American tastes. Even though Starbucks has been labeled as being “Fritalian,” it definitely would not pass as the real thing here in Europe. In fact, I haven’t seen a single Starbucks here yet.

Something funny – the Nespresso spokesperson is George Clooney. So, it is fun to see all their advertising, even if you don’t get a chance to try their product. There is a Michel Gondry commercial, starring George Clooney, here. We have a Nespresso machine in our apartment, and the coffee is really very good.

Nespresso seems like a very successful combination of several good investing ideas. First, it is an addictive product. Secondly, it is a good retailing play because it can be sold in many channels. Lastly, it locks the user into the cartridges and other accessories.

One of my first “to-do” items once I hit the states is to do some research on Nestle S.A. The other good thing is that you can stay away from the weak dollar and get into the Swiss Franc – a very stable currency.