Nespresso. Ignorance is the margin.
Nespresso costs roughly what Wagyu does by weight, for objectively worse coffee. It's an eight billion dollar business built on selling you the button.
THE GIST ON NESPRESSO: "Pod Complex"
Why is Nespresso as expensive as Wagyu?
Nespresso coffee costs, by weight, roughly the same as a Wagyu steak. Except Wagyu is the finest beef on earth and Nespresso is, objectively, worse coffee for objectively more money. And it's an eight billion dollar business.
Who is it for?
Before Nespresso there were two types of coffee drinker: people who cared and people who didn't. Nespresso invented a third: people who care about coffee but don't want to learn how it works.
So the boutiques look like jewellers, the pods come in black and gold and George Clooney drinks it. All designed to make pressing a button feel like the connoisseur's choice.
What did it flip?
Convenience has always been a trade down. Ready meals, fast food: you sacrifice quality for ease and you pay less. Nespresso inverted it. The easiest possible way to make coffee became the most expensive.
Before, expertise commanded a premium. Nespresso proved the opposite: replace everything the customer needs to know with a button and the price goes up.
Where does that lead?
If the premium lives in removing knowledge, every business has an incentive to make sure you never learn. The moment you figure out a cafetiere makes better coffee for a fraction of the cost, they lose you.
The biggest profit margin is our ignorance.
Pods, cafetiere or something else?
Your take. One tap, then see how everyone else voted.
Quick answers
How big is Nespresso?
Huw calls it an eight billion dollar business.
What did Nespresso change about convenience?
Convenience used to mean paying less for lower quality. Nespresso made the easiest way to make coffee the most expensive.
Where is the profit?
In removing the knowledge the customer needs. The less you understand, the more you pay.
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