Why Nespresso’s honey rollout is more about brand than product

“Developing this product was not just about creating honey,” CEO Alfonso Gonzalez Loeschen told Modern Retail. “It was about integrating it seamlessly into our overall brand story and offering something truly special to our customers.”

Since 2020, Nespresso has partnered with Ubees, a beekeeping initiative that works with brands as part of the regenerative agriculture movement. The initiative helped the coffee farms that work with Nespresso learn to how to start beekeeping. Then their honey harvests were used for its new Nespresso Bloom products.

The Nespresso Bloom line launched in two cafes in San Francisco and New York in early August and was listed online on August 21. The products sold out within a day, Gonzalez Loeschen said.

But the launch also hits at a moment when Nespresso is eager to own the narrative around its sustainability efforts. Pod-style coffee companies like Nespresso are often criticized for potential environmental harm. Beyond the single-serve component, recycling facilities aren’t always equipped to break down Nespresso’s aluminum pods — or consumers simply through them in the trash. In response, Nestle-owned Nespresso is aiming to highlight the work its doing on the front end to ensure its products are sourced sustainability.

Gonzalez Loeschen said that the company is expanding its curbside recycling partnerships with municipalities so Nespresso users can throw pods in with the rest of their recycling. The company has also invested in switching to compostable pods. It also markets drop-off recycling at its cafes or free mail-in recycling.

“We’ve been doubling our efforts in communication, engaging with customers, and educating them on how to recycle, which is crucial to our sustainability goals,” he said. “We’re continuously increasing our recycling rates year after year in the U.S., but there’s always room to do better.”

In coming up with a honey product, Gonzalez Loeschen said Nespresso aimed to showcase its commitment to responsible farming and regenerative agriculture. Bees are an important part of that process because they can increase pollination. While some of Nespresso’s partner farms already had bees, Gonzalez Loeschen said Ubees was a major link in getting others involved and helping the farmers develop their beekeeping operations, which may also provide a second stream.

“A lot of our work is to protect the future of coffee, but, at the same time, have a positive impact on the environment and on the social conditions and the living conditions of our farmers,” he said.

Carly Sutherland, a brand strategy consultant, said companies often use product expansion to share their brand narrative. This helps them position themselves as something greater than their core product — like how a protein bar company might call itself a tool for increasing muscle. This leaves room for more introduction down the road. “When brands have a strong conviction, it makes introducing new and relevant products a cohesive part of their ecosystem,” she said, “and in some cases, it’s a no-brainer.”

Forrester’s vp and principal analyst Dipanjan Chatterjee said that the environmental aspect of Nespresso Bloom may be compelling to certain markets or consumer segments who are more environmentally and ethically-minded in their purchase considerations. “That said, an environmental enthusiast will likely find better options at a local farmers market than a $100 billion global consumer products behemoth,” he said.

Still, Chatterjee said the honey pilot is a smart expansion and could be an add-on to boost sales. “The product fits neatly into their existing distribution, and if it were ever needed, Nestle’s retail relationships would make it very easy to gain shelf space at major retailers,” he said.

Nespresso saw 5.3% organic growth in 2023, according to Nestle’s full-year earnings report. The coffee category was also the largest driver of organic growth for the first half of 2024, which also includes Nescafe and the Starbucks license for grocery and retail. Nespresso saw single-digit growth in North America, driven by the sales of its single-cup brewer Vertuo.

As far as a product strategy, honey is a smart pick as its popularity as an alternative to sugar is on the rise. Jon Deustch, a Drexel culinary arts professor who is one of the SFA’s trendsetters, said honey is popular with younger consumers who are unlikely to drink strong black coffee preferred by older generations.

“The flavors work really well together, and the floral notes of the coffee have a synergistic effect,” he said. “Honey lattes and honey-flavored coffee drinks have been really popular, and for good reason.”

Nespresso’s Gonzalez Loeschen said younger consumers were top of mind when developing Nespresso Bloom. Not only do they prefer sweeter coffee, but they may also be more interested in the product’s origins than their older counterparts.

While he wouldn’t share whether Nespresso intends to expand the line or get into other sweetener products, Gonzalez Loeschen said there could be further honey-related innovations in the future. And the company will continue to build up the supply.

“Honey consumption overall is on the rise,” he said. “So, when you look at those trends from a consumer perspective and particularly those who are more health-conscious, it just makes sense.”