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Home Business Starbucks also wants to conquer the coffee bean market in Israel

Starbucks also wants to conquer the coffee bean market in Israel

Nestle Barn Expands the presence of the brand Starbucks In Israel. A year after entering the retail chains with the capsules of the e brandcoffee Starbucks, Osem-Nestle will start selling coffee beans of the American brand in the retail chains in Israel. Article link

The coffee beans will be sold after Passover in three levels of roasting, in packages of 450 grams.

“For some consumers, the brand has created a connotation of overseas at home against the background of flight restrictions,” describes Nahum Zeiman, CEO of the Nestle Coffee and Breakfast Division, of the company’s rapid penetration into the Israeli market through the capsules, adding: “We think “Starbucks can have a significant development in this segment, and we want to make it more accessible in the food and pharma chains as well.”

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This move comes after in 2020 the Starbucks brand capsules managed to capture a significant share of the capsule market previously dominated by Strauss capsules under the Elite brand, with the entire market growing thanks in part to the effects of the Corona crisis.

If so how much has the market grown? In 2020, sales of the capsule category sold in the retail chains amounted to NIS 150 million, an increase of 55% compared to 2019, and a jump of about 125% compared to 2018. This is according to Sterncast data.

And back to Starbucks capsules: if in the first half of 2020 Osem-Nestle was a tiny player in the capsule market with a cash market share of less than 5% while Strauss dominated the market with elite brand capsules with a share of over 44%, then in the second half of 2020, Osem-Nestle’s financial market share climbed to 21%, while that of Elite was cut to about 35%.

In this context, however, it is worth emphasizing that Starbucks capsules are more expensive than those sold before in the retail chains in Israel, and their price is similar to that of the capsules of the other arm of Nestle in Israel – Nespresso, which sells its products in stores and online, and not through retail chains. For the time being.

This means that Starbucks capsules are more expensive, that its financial share is more significant, and therefore the quantitative market share (i.e. the number of units sold) is also interesting in this context. In quantitative terms, the control of Strauss’ capsules under the Elite brand remained dominant; If in the first half of 2020 its quantitative market share was about 50%, in the second half of the year it eroded to 41%, with Starbucks capsules occupying a 17% share in the second half, compared to about 3% in the first half. In other words, quantitatively, the gap between the two is still 24 points and a market share, thanks to Starbucks’ relatively high pricing.

Anyway, now Osem-Nestle is looking to produce a new category on the shelves of retail chains, and sell coffee beans for grinding in a home machine. Nowadays this category is not really present in chains, and coffee beans are mostly sold in cafes, online and in specialty stores like those of Landover Coffee. Nestle Barn estimates that Israel has exceeded the number of 50,000 households that own active coffee bean machines, and estimates sales of the coffee bean market at about NIS 60 million a year.

It can be estimated that in parallel with the entry of Osem-Nestle into the marketing chains with the Starbucks brand, competition will increase as well as the interest, in front of the players currently active in the category, including Strauss Elite coffee beans, the Lavaza brand, and smaller players such as Naturfood. . In this context, we would like to mention that Strauss currently operates a venture under the name Binz, in which it markets both coffee machines and coffee bean blends as part of a periodic subscription that, like Nespresso, is not sold in retail chains.

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