Nespresso cites slow office demand for not raising its coffee prices: Reuters

Despite a sharp increase in benchmark prices for arabica beans, Neslté SA’s premium coffee unit Nespresso has not raised prices for its capsules, according to a Reuters interview with Nespresso North America chief executive Alfonso Gonzales Loeschen.

Loeschen, who joined Nespresso’s U.S. division in 2020 one weeks before the pandemic led to lockdowns, told Reuters that the company has “so far absorbed price increases instead of passing on the higher costs to consumers, until there is more clarity about the market direction.”

Citing less production in Brazil and disruptions to the supply chain, Reuters reported that benchmark arabica coffee prices on the Intercontinental Exchange (ICE) reached the highest level since November 2016, earlier this month. 

In the interview, Loeschen said Nespresso’s direct sales to consumers rose 20% during 2020, prompting adjustments for stronger logistics for online sales.

He noted that now all its coffee retail stores are open, but sales are slow to offices, where he estimates that only about 20% of the workforce has returned. A return to pre-pandemic office sales levels is not expected until at least 2022, Loeshchen advised.

Visit Reuters to see its interview with Loeschen.