Nestle’s subsidiary, Nespresso, on Thursday opened its first boutique store in India at the Select Citywalk Mall in Delhi’s Saket.
Nespresso and Nestle India have entered into a distribution arrangement with Thakral Innovations. It will be the official distribution partner and will cover the full range of Nespresso coffee products across B2B channels.
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The Nespresso website went live earlier this year. It makes coffee machines and coffee pods.
The company has been sourcing coffee from the country since 2011 and has a collaboration with around 2,000 farmers here. In the coming years, it is likely to increase the sourcing of premium coffee from the country.
During the analyst call last month, Suresh Narayanan, Chairman and Managing Director of Nestle India, said that they see Nespresso and premium coffee as a big opportunity for growth. He said that after Delhi, the next boutique will come up in Mumbai and then in other cities. “Cafes are driving coffee culture and that gives us also the opportunity,” he said.
He also said that premiumisation offers an opportunity worth Rs 7,500 crore. At 16% per year since 2015, the growth in premium products is outpacing the overall demand growth.
Currently, Nespresso’s pack of 10 capsules sells at Rs 950 and pack of 50 capsules at Rs 4,750. These packs are imported from its Switzerland factory.
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With the rise in demand, and depending on the response to the boutique, the company may increase its domestic sourcing for the stores and online channels here.
According to people in the know, this may change after the free trade agreement between the European Free Trade Association and India comes into force. Switzerland is a member of EFTA.
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