Coffee in Denmark is a very popular and growing product. A lot of brands try to make it at this market, but it’s tough because there are a lot of competition and the prices are very low, so if you’re not selling a exclusive or unique product you’re not going to make a big profit. The big companies who are retailers at the market compete with each other, but also with all the cafés in example Copenhagen. A lot of people go to these cafés to have a better quality coffee and have a cozy time while drinking the coffee, than the coffees you can bye in the supermarkets.
In 2011 there were a very strong increasing in the unit price of the coffee. The unit’s prices for fresh-grounded coffee increased with 29%, which is a huge gain. The context between the expensive global and retail prices is caused by several factors. The factors are bad harvests, the consumer’s speculations and the increasing payment to the growers contributed. Although the higher prices of coffee it’s still the favorite hot drink among the majority of consumers in Denmark, but because of the financial crisis the Danish consumers became conscious with their money and how they wanted to use them. Especially the crisis in the southern Europe had a negative impact on buying behavior, and in the consumer’s expectations in Denmark. As a consequence the Danish consumers decreased their spending on coffee in 2011.
Standard fresh ground coffee remained its popularity as the biggest category in Denmark in 2011. Instead of the old coffee filter machine Danish people’s consumption on espresso machines and pod machines has been increasing the last few years. These innovative machines can make other kinds of coffee for instance a latte or cappuccino, and people are demanding these kinds of coffees instead of just black coffee. They want alternatives to the cafés, who are a lot more expensive than the new machines eventually. The increase in sales of fresh coffee beans and fresh ground coffee pods has cost a decrease in the sales of standard fresh ground coffee, as a consequence of the new products popularity. Although they got more popular on the market, the variants are still limited in Denmark. The most popular and selling brands are the Tassimo from Kraft Foods Danmark A/S, Senseo from Merrild Kaffe A/S and Dolce Gusto from Nestlé Danmark A/S. Because of the limited selection the companies are forced to sell their products on the Internet, where there are much more variants available.
Also another new product dominated the coffee market, that is the instant café latte, espresso and cappuccino coffee, which also got more widely distributed on the market in Denmark.
An important trend is also the small specialist coffee shops in Denmark; most of them are located in the city, mainly in Copenhagen. Their sales are increasing due to the rose in the consumption of espresso and other espresso based drink.
Merrild Kaffe A/S is the leading brand on the coffee market. The company are well established and have a strong position due to it’s widely distribution network and their reputation, which is very good. The consumer’s perceive the company is a company with strong loyalty.
SWOT Analysis for Dolce Gusto
The machines are a good combination of user-friendliness and at the same time good quality. The machines are very simple to use and the customer don’t need a broad knowledge to use and know the machines. The machines are also very compact, they don’t need a lot of space as other advanced coffee machines. The designs and different machines also make it easier for the customer, because they can choose the machines that fits them the best. Nescafé is a subsidiary of Nestlé. Nestlé is a very old and experienced company on the market and they have been for a long time, that’s why they have a very well known company.
Nescafé are not very good at promoting Dolce Gusto. I have not seen a commercial...