Strauss Group Ltd. (TASE:STRS) unit Elite Coffee today launched espresso capsules specially designed for Nespresso coffee makers. The launch sets up a possible direct challenge to Nestlé SA (SWX:NESN), which owns Nestlé Nespresso SA.
Today's launch comes one year after the failure of Strauss's takeover attempt of Espresso Club Ltd., through which Strauss planned to enter the thriving espresso capsule market. This time, Strauss decided not to present its own coffee maker with special capsules, but to sell espresso capsules as a product that will directly compete against Nespresso, the oldest and leading company in the sector.
Strauss will sell its espresso capsules at NIS 1.70 per unit, 25% less than the NIS 2.30 per unit for Nespresso capsules. Strauss will also sell its capsules via supermarkets (at Rami Levy Chain Stores Hashikma Marketing 2006 Ltd. (TASE:RMLI) and Yeinot Bittan Ltd. in January, and other supermarkets in February). The Strauss capsules, like Nespresso, will be sold in packs of ten capsules.
Strauss will sell four flavors, and there is no caffeine-free capsule, compared with twenty flavors for Nespresso.
Published by Globes [online], Israel business news - www.globes-online.com - on December 26, 2012
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