Nespresso, the premium coffee-capsule division of food group Nestle, expects to reach two billion Swiss francs (US $1.9 billion) in sales in 2008, two years earlier than planned, an executive of the company told Reuters.
"We have the projection that we're going to meet the 2 billion objective by the end of the year, which we revised. Originally we planned to have it in 2010 but thanks to the growth we enjoyed, we believe we can get this," said Karsten Ranitzsch, head of green, or unroasted, coffee for Nestle Nespresso S.A.
The company's overall sales in its coffee and equipment hit 1.7 billion Swiss francs in 2007, Ranitzsch told Reuters on the sidelines of an annual Rainforest Alliance event in New York. The premium quality coffee company had said last year that it could reach the 2 billion Swiss franc mark in 2009. The company also plans to expand its number of Nespresso Boutiques around the world by nearly 60, bringing the total to about 175. "We continue to grow," Ranitzsch said.
More than 1.5 million club members buy Nespresso coffee capsules regularly from its boutiques, online or by calling a toll-free number. Nearly half of the sales are done on the Internet, Ranitzsch said. Capsules are small packets of ground beans through which hot water is shot by a machine to brew one cup of coffee at a time.
Last year, Nespresso built its second capsule factory in Switzerland. The plant recycles rainwater, a part of the company's efforts to be ecological. Nespresso has a AAA sustainable coffee verification program, which it developed with Rainforest Alliance and other partners.
Rainforest Alliance is an international non-profit conservation organisation based in New York that certifies farms, which meet specific criteria aimed to benefit both farmers and the environment. This is also called "sustainable coffee."
By 2010, the Swiss company aims to increase the amount of sustainable coffee it buys to 50 percent from 40 percent currently. "We go into the regions where we know the farmers can produce the right quality of coffee. We actually help them to improve the quality and consistency of the coffee so it's a continuous improvement cycle," Ranitzsch said. This helps to improve farmers' yields and quality, he said. "In our belief, there's probably one to two percent of the world crop which would really have the right flavour for Nespresso," Ranitzsch said.