Sara Lee fights for coffee machine market
Valor Econômico 09/21/10
Nearly four years ago, with the arrival of the Nestlé Nespresso stores to Brazil, good part of the Brazilians has changed the way they make coffee. They left aside the simple coffee machines, the filter and the coffeepot, to use coffee machines that cost from R$ 399 (US$ 228) to R$ 25 mil (US$ 14.3 thousand). Now, the American Sara Lee enters in the dispute. National leader in roasted and ground coffee, the company is launching the model that promises to be the cheapest of the market, Senseo, made by Philips in Poland. Initially, the machine should cost R$ 399 (US$ 228), the same value as the less expensive model of DeLonghi. After market researches, the price dropped to R$ 299 (US$ 171). "Our product had to have an affordable price because we want it to be the coffee machine of the everyday of the Brazilian", says Ricardo Sousa, Marketing Director of Sara Lee.The company, which in April launched in Europe the L'OR coffee capsules, much cheaper and compatible with the Nespresso machines, is one of the main rivals of Nestlé in the coffee battle. Owner of the brands Pilão, Café do Ponto, and Caboclo, Sara Lee sells coffee machines in 12 countries and it is, according to Souza, the world leader in single serve coffee machines, as are called the coffee machines that work with sachets or capsules. Dolce Gusto, the less expensive coffee machine of Nestlé, was launched early last year and it costs, on average, R$ 599 (US$ 342.3). Today, the company is launching the second model of the line, Circolo, with an innovative design and suggested price of R$ 1 thousand (US$ 571.4).
In Brazil, due to the characteristics of the market, Sara Lee has decided to launch its machine before bringing the L'OR capsules, which still have no date to arrive here. "Here, only 30% of the households have coffee machines and 93% of such total are regular coffee machines that cost less than R$ 90 (US$ 51.4) and use filters. Only 7% are espresso coffee machines", says Luiz Camargo, Manager of domestic appliances of Philips.
Senseo, according to Sara Lee, is not an espresso machine. Espresso, explains Sousa, needs pressure of at least 15 bar (unit of pressure). "Our machine has 1.6 bar of pressure, which makes foam in the coffee", says the Executive. The sachets of Senseo will be sold under the brand Pilão, in three flavors (traditional, intense and summer) at an average price of R$ 0.55 (US$ 0.31). The capsules for a dose of Dolce Gusto, one of the best selling machines of the market, cost from R$ 1.20 (US$ 0.69) to R$ 1.80 (US$ 1) each. Dolce Gusto is sold by Nestlé and made by Arno.
The goal of the American multinational is to achieve the leadership of the market of single serve coffee machines. "We want to sell half a million units in three years", says the Executive of Sara Lee. The appliance lands in the market, first, only at home appliances stores in the metropolitan region of São Paulo. It will be distributed to all of Brazil over the Internet. "This is a strategy of Sara Lee, which all over the world begins launching its products at the largest market and then it gradually expands the distribution", says Souza.