Who owns Nespresso? Everything you need to know about the high-end coffee company

Nespresso, the high-end coffeemaker that promises café quality espresso at home, has certainly made a name for itself in the coffee world. Whether it is simply a clever marketing strategy or an indication of its good worth.

Claiming to be “the world leader in coffee machine, capsules and coffee accessories”, Nespresso has been catering to luxurious coffee lovers around the globe for more than three decades.

Nespresso is a subsidiary of the multinational conglomerate Nestlé S.A and the idea for it was conceived by its employee Eric Favre in 1975

With its headquarters located in Lausanne, Switzerland, Nespresso is a subsidiary corporation of the Swiss multinational food and beverage conglomerate, Nestlé S.A (Société Anonyme, which is a French phrase for a public limited company). It was officially founded by Nestlé in 1986 and has been a part of the company’s brand for 36 years.

However, its origin dates back to almost ten years before its authorized distribution in the market. It all began in 1975 when Eric Favre, who was an engineer working in the packaging department at Nestlé’s headquarters in Vevey, Switzerland, took a vacation to Italy with his wife. The trip was apparently undertaken in search of the perfect espresso to fulfil a professional and personal quest of Favre’s.

In a 2010 interview with WIPO Magazine, Favre states that he came across a coffee bar named ‘Café Sant’Eustachio’ in Rome, where a large number of customers had queued outside to buy espresso from the barista, Mr. Eugenio. Curious about why the coffee in that certain cafe tasted superior to the other cafes, Favre soon learned that the distinction was in the way it was prepared.

“Mr. Eugenio still used the old classic four-piston coffee machines. To prepare a coffee, he didn’t pull the piston down once like everybody else; he pumped it three or four times. Mr. Eugenio helped me to understand that for a good espresso coffee you need to introduce a maximum amount of air into the water before it comes into contact with the coffee,” he told WIPO Magazine.

Following this realization, Favre invented the original Nespresso capsule and obtained a patent for the coffee machine in 1976. Speaking about how his ideas came to be, he explained;

“Espresso is made of a mix of air, water, and coffee oils. It is very simple, but nobody had thought about it before. In fact, I didn’t invent a capsule; I invented a formula, and that is much stronger.”

Furthermore, Favre served as the first President and General Director of Nespresso until he stepped away from the company in March 1990. His reasons for leaving Nespresso emerged from conflicting leadership ideals he had with other heads of Nestlé around the world. He elaborated the situation to Global Coffee Report Magazine, saying;

“We had to tell all the bosses from Japan, Germany – all over the world that they were the masters of all of Nestlé’s products, except for one – Nespresso. This naturally led to a large amount of antagonism and the more success I had with Nespresso, the more problems I had in dealing with these global markets.”

From 1988 to 1997, Jean-Paul Gaillard served as the CEO of Nespresso and revolutionized it from an office coffee machine to a luxury brand

Jean-Paul Gaillard, the creator of the Marlboro Classics clothing brand, was brought in by Nespresso executives to revive its product after its initial pitch as office coffee machines to Switzerland and Japan failed to attract takers. Gaillard told The Guardian;

“At the original launch the product was wrong, the positioning was wrong and the targeting was wrong. It had cost a lot of money and brought nothing.”

One of the first reforms under Gaillard’s management was to reduce the price of the machines and raise the price of capsules. Moreover, his strategy of marketing Nespresso through the ‘Club Nespresso’ to individual customers and businesses transformed the branding of the company into the luxurious brand it is known today.

Regarding the transition of Nespresso from an office machine to a luxury one, Gaillard told The New York Times that he had wanted to “create the Chanel of coffee, and decided to make Nespresso chic and bobo”. He further stated that “the idea was to keep it to the level of people who have a doorman”. Thus, Nespresso was known to cater to the elite crowds who had to purchase its coffee capsules to join the elusive Nespresso club.

But tensions were brewing in the company between Favre, its founder, and Gaillard, who was successfully running it. Reportedly, another reason for Favre’s resignation from Nespresso was due to differences of opinions and personality clashes with Gaillard, wrote The Guardian.

Not mincing his words, Gaillard said, “Those who really know the story, know it was me. Favre was a technician. He couldn’t run the business.”

In 1997, Gaillard decided to leave Nespresso to work on Nestlé’s ice cream business in the US. However, he soon left the company altogether after having a fallout with the then CEO of Nestle, Peter Brabeck-Letmathe.

Guillaume Le Cunff succeeded Jean-Marc Duvoisin as the CEO of Nespresso from January 1, 2020

In December 2019, Nespresso announced a change of leadership on their website stating Guillaume Le Cunff, who was the President of Nespresso USA, will succeed Jean-Marc Duvoisin as Chief Executive Officer for Nestlé Nespresso S.A effective from January 1, 2020.

During Duvoisin’s tenure as CEO, notable achievements include the successful launch of the VertuoLine system of Nespresso machines and further market expansion to Asia. Moreover, he pioneered sustainability as an important part of the brand’s working.

On the other hand, as the President of Nespresso USA from 2015 to 2020, Guillaume’s management elevated its status from a niche brand to a “recognized ultimate brand for coffee connoisseurs”. Also, according to Perpetual, his contributions as the global CEO of Nespresso is centered on promoting its sustainability and empowering and reviving the economy of coffee farming communities in the world.

Le Cunff states that “sustainability is increasingly inherent in every constituent part” of activity that runs the business of Nespresso. He further wrote:

“I’m proud that we’re already making positive strides in this direction: deploying solutions, such as initiating agroforestry coffee cultivation, reviving coffee production in post-conflict areas, the first pension savings plan for smallholders and driving the circular use of aluminium. All of these activities play their part in delivering the overall Nespresso experience.”

Therefore, in recognition of Nespresso’s achievements in sustainability, the company was voted the “Most Sustainable Company in the Coffee Processing Industry 2021” by World Finance Magazine.