Nespresso machines and its copies are a growing market – and so are their capsules.
After the expiration of some of Nespresso’s capsule patents, many manufacturers have jumped on the capsule manufacturing bandwagon.
Mad Coffee Capsules, a private Sydney business, is one of them, and they have invested $20 million in the largest capsule production facility in the southern hemisphere in Wetherill Park.
“We work with coffee-roasting companies, leading supermarkets, and companies who want a brand but don’t have manufacturing capabilities,” Mad Coffee Capsules business development manager Kane Bodiam said.
Mad Coffee Capsules produces Nespresso-compatible as well as larger capsules for packing coffee. It also roasts coffee for capsules and despite high labour costs, all operations are being kept in Australia.
“There is a bit of technical work around roasting and packing in capsules. If we were to do it offshore we would need our specialists there.
“You couldn’t outsource those services because they need to be controlled,” Mr Bodiam said.
He is not wrong.
“Making good coffee is a real science,” Crema Espresso managing director Antony Forbutt said.
Mad Coffee’s closest rivals in Australia are Podista and Capsule Pack but they have much smaller operations, according to Mr Bodiam.
Mad Coffee is working towards making biodegradable capsules and supplying capsules overseas. It is currently securing deals with Malaysia and Singapore.
Industry players agree the capsules sector is growing but maintain the bean-drinking sector will remain unaffected.
“I think capsules will grow because it is convenient. But having a good coffee is still more than just a press of a button. There will still be a market for barista-style coffee,” Crema Expresso’s Mr Forbutt said.
The machine-capsule market will emulate the printer-cartridge business model in the printing industry, according to Mr Bodiam.
“Capsules will be the money makers but unlike printers which just gives you a piece of paper, with capsules, you get an experience at home!” Mr Bodiam said.
Mad Coffee is on track with their investment who are looking to get a return on investment in 18 months.
“The ground coffee market is only worth $120 million in Australia, instant coffee is $600 million. In Australia we like to think we are coffee snobs but 75 per cent still drink instant coffee. We are the highest consumers of instant coffee on the planet,” Ms Arias said.
Photos: by Cafe Culture International