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Coffee pods: Why we all want what George Clooney is having

They're eco-unfriendly and cost the earth to run – but does that deter us from buying capsule coffee machines? Does it heck, says Samuel Muston

Samuel Muston
Friday 28 September 2012 17:43 BST

Once, a coffee machine in your kitchen was a rare thing, a thing to induce envy in friends and colleagues, like a Porsche in the drive but without the connotations. It marked you out as discerning, an aficionado of the Finer Things: you were probably the type who got their wine from a merchant, rather than an offie; your veg from a farm shop, long before that was a thing.

You needed a large wallet, too, and a commensurately large kitchen. Those proudly mechanical Gaggias – and they always seemed to be Gaggias – were quite often the size of a small car, and made nearly as much noise as they coughed into life with steam-train blasts and gear-tearing roars.

Today, though, an after-dinner espresso or early-morning cappuccino is less likely to be occasioned by a roar – more of a plonk and click. In 2012, your caffeinated kick is more likely to come not from a bag of beans, but a little metal pod.

A coffee machine in the home has come to mean coffee from a capsule. Whether that is Nespresso, Lavazza, Dualit or the latest newcomer to the £4bn coffee capsule market, Starbucks. Yes, the company famed for creating the "third place" coffee shop, has turned its attention to the first place – the home.

It has just launched two new espresso machines with Italian maker Verismo – the 580 at £149 and the fancier 585 for £349 – both of which run exclusively on single-use pods packed with Starbucks' Fairtrade coffee. It would appear counter-intuitive at first glance: why would a coffee shop try to make inroads in the home coffee machine market? Wouldn't a Starbucks in the kitchen mean none in the shop?

Quite the contrary, claims Ian Cranna, Starbucks' vice president for marketing in the UK. "We expect it to increase people's ability to connect with the brand, rather than the reverse. People want Starbucks wherever they are and this is just one of a series of ways people can do that."

Maybe, though, there is another reason – maybe it simply doesn't care, given the numbers involved. The premium single-cup pod market, as it is known, grew by a fully caffeinated 143 per cent last year. And John Lewis, the barometer of middle-class desire, reports a 53 per cent year-on-year sales increase for pod-only machines.

And, of course, there is the matter of profit on the pods themselves: the hermetically sealed aluminium capsule with its 5.5 grams of coffee retails at 50p apiece, with an estimated 20 per cent of that profit. The company as a whole has a profit margin of about 10 per cent. Little wonder that Starbucks wants a slurp of the crema – especially given that until 13 years ago the market didn't even exist.

So where did pods come from? Although Illy claims to have invented the idea of the pod, it is Nestlé who parlayed it into a global phenomenon. It launched the Nespresso in 1986 in Switzerland and Japan. It had one aim: turn us all in to our own barista. And it has been monumentally successful. The Nespresso concept – simple-to-use, heavily branded machines running only on capsules and producing uniformly decent coffee – spread like an ink blot out from the initial launch countries, conquering North America, France and even the spiritual home of the espresso, Italy, before landing here in 1999.

Today, Nespresso employs 7,000 people across countries and has 270 boutiques (including premises on the Champs-Élysées and Beauchamp Place in London) selling 16 varieties of "grand cru" coffee. Last year, profits grew by 30 per cent and there has been no weakening during the downturn, despite it being an unapologetically luxurious product. So far, Nestlé has sold 28 billion capsules; enough to make everyone on earth four cups. "You have to give it credit for the marketing," says David Veal, executive director of the Speciality Coffee Association of Europe, "it has drawn millions of buyers to its Nespresso club".

It is the club, with its 7 million members, which has driven the exponential growth. This elect is coddled by almost excessively efficient customer service and regular magazine mailouts bearing the friendly visage of one George Clooney. But club members also face a choice: buy your capsules from Nespresso – or your expensive machine become defunct. It is a loaded choice, of course, and one shared by all those with a pod machine.

The attraction of pods for the makers is as plain as a pikestaff – they provide a steady source of income, like an insurance policy but without the possibility of having to pay out. So what is in it for the consumer? Convenience, says Gregory Easton, electrical buyer at John Lewis. "They are a quick and easy solution for people, anyone in a rush in the morning is guaranteed consistency." It is this that perhaps explains why 17 Michelin-starred restaurants in the UK, including the Fat Duck, Sketch and The Ledbury, use Nespresso.

As with all luxury products, pods have their detractors. "Capsules have provided an entry point for people not familiar with fresh coffee but I would prefer it if that is not where the connection ends," says Veal. "If similar beans and similar roast was used, a fresh home-ground bean will always taste better than a capsule or, indeed, a bag of pre-ground coffee."

Veal is also dismissive of some of the florid rhetoric employed by makers. "The phrase 'grand cru' might mean something to a sommelier but not much to those in speciality coffee," he says. The dreamily named vivalto lungo and arpeggio have "no meaning whatsoever".

There is also the environmental and ethical impact to consider. Although, laudably, by next year Nespresso has committed itself to sourcing 80 per cent of its coffee from top-notch AAA Sustainable Quality sources and Starbucks uses only Fairtrade coffee, both have created a whole new strain of rubbish with the pod. "Coffee capsules have a high environmental impact," says Joan Marc Simon of Zero Waste Europe. "Grounds are high in nutrients if they are composted after use. However, if crushed with aluminium or plastic, recycling becomes more complex. Both can be recycled if collected separately but evidence shows collection rates are low if not marginal."

And yet we buy them – buy them by the box load. Why? Because they are almost the definition of luxury: they are a pleasure that requires little effort; an indulgence requiring no effort of discernment. Sure, they complicate a simple process, creating unwanted by-products as they go; yes, they lack the style of the old Gaggia and they physically disconnect us from the product we are about to consume. Yet they make life easier, neater, safer – and for most of us, that trumps all else. We get the products we deserve.

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