Nespresso North America CEO on reinventing the brand for Gen Z

If most Americans can agree on one thing, it’s a good cup of coffee. And over the years, chains from Starbucks and Costa Coffee to newbies like Blank Street Coffee have competed for that title.

Meanwhile, Nespresso has been gunning for a different cause: making the best cup of coffee at home. Since entering the market in 1986, the DTC retailer has been rolling out a series of different flavored coffee pods that have over time gained popularity across the world, including in the US.

In the first half of 2023 alone, Nestlé reported 4.5% organic growth for Nespresso.

“[The first half of] 2023 has been a strong priority,” Nespresso North America CEO Alfonso Gonzalez Loeschen told Retail Brew, adding the brand has notched double-digit growth in North America. “Our focus at Nespresso now is innovating the premium coffee experience, not only to continue enabling this growth, but really to try to capture younger generations, within our system and within our brand.”

To do so the brand has looked to innovative new solutions and the unique preferences that differentiates the young North American coffee drinker, and it really comes down to two words: iced coffee, the unofficial American drink of choice.

“Iced coffee is coffee, right?,” Loeschen said. “So you go to coffee shops, and the majority of beverages drinking coffee shops are whitened, sweetened, and cold. We view this as a huge opportunity for us.”

This year, Nespresso released its “smallest and most affordable” Vertuo machine yet, according to the company. It’s called Pop, and it comes as both a hot and iced machine solution.

“New generations like Generation Z, which has an even higher propensity to drink cold drinks is one of the biggest opportunities that will happen,” Loeschen added. “So when we talk about innovation, two of our biggest innovations in 2023 are catering exactly to this iced coffee opportunity.”

While the iced coffee market is huge and also very competitive, Nespresso has tried to up its game by also introducing interesting flavors like Juicy Watermelon Over Ice and a Cold Brew Style coffee to its permanent offerings.

The brand has seen almost 25% growth in permanent collection iced coffee capsules between Q1 2022 and Q1 2023.

“[Juicy Watermelon Over Ice] was a really polarizing flavor, but did very well.” Loeschen said. “But we also launched a pretty nice portfolio of permanent iced coffee, which is called Proof, and that’s one that now, it’s part of my daily repertoire.”

But we know the key to keeping Gen Z engaged is always having something new and Nespresso has caught on as the company works to introduce newer styles of coffees and flavors in the coming months. Will they be as fun as Juicy Watermelon Over Ice? Well, we hope so.