Nespresso: Innovation or Disaster?
Nespresso coffee. The delightful little pod that delivers an effortless quality expresso to your countertop at the touch of a button. A business model lauded as a remarkable innovation. Given its origin in 1986, it is a long brewing one (pun intended). What if I told you that the value to users is a lie?
The Nespresso coffee is a pivot in the coffee drinking experience that manages to persuade you to pay more for coffee then if you made it for yourself. It achieves this with a mixture of the convenience of the design and strong branding. It is the perfect business model for business growth, as the user constantly has to buy new components (pods) to make coffee.
It is striking that the business model canvas, a common design tool for innovating business models, doesn’t have any space to explore the impacts or sustainability of the products or services that a company makes.
The New York Times suggests that 27 billion capsules have been produced worldwide since the Nespresso pod was introduced in 1986. Let me rewrite that as 27,000,000,000,000 capsules. It’s startling to think about how many tonnes of waste this business model has contributed to the environment.
Physical waste is not an abstraction. It is football fields full of little alumium pods, filled with the detritus of instant coffee. Those pods have to go somewhere. Someone has to do something with them. If they end up in a hole in the ground, at some point someone in the future has to deal with it.
So here is the question; is a Nespresso coffee still of real value to a user, if the coffee means a long-lasting impact on the world in which we all live?
Clearly, the growing feedback has reached Nespresso, with its gradual shift to better recycle the aluminium in its pods. On paper this seems like a good thing, after all, recycling the pods removes them from the waste cycle. Nespresso is proud to announce that aluminium is infinitely recyclable.
Without clear detail on how many pods go through this process, the concept seems a strong lean into a circular economy. Circular economies are were goods and services are not thrown away, but are totally recycled into new products, services and value to society.
Granted, this sourcing and recycling adds an unaccounted burden to the system that further impacts unseen costs of your single cup of coffee. It takes resources and energy to recollect the used pods, separate them, melt them down and reform them into a new useful product. If these costs are removed from the equation, then our calculation of value is incomplete. If pods escape this cycle and end up being dumped then then the circularity is lost. Furthermore, research has yet to answer whether aluminium is even a safe material in the volumes that we encounter it.
Sadly it seems our technological capacity to deliver a circular economy has grown, while our ability to hardness that capability for recycling has stayed the same or declined. Nespresso, for all its pods, is only a fraction of the waste created every year.
Here is the rub. We all share the blame for this. Creating products and services that are responsibly managed from cradle to grave and then reborn as new products and services costs. It either costs a company in reduced profits or the users in increased costs for their products and services. If it costs, then it comes back to us. Nespresso pods are not value to users. They cost us all. With a full and proper accounting for its impact on society, the Nespresso business model is not an innovation.
It’s similar to the mining of mineral resources, which, though sourced, extracted and managed by private companies, produce side effects that impact the commons. As a side example, one of America’s richest men of the early 1900s, William A Clark made part of his very large fortune from mining arsenic in Minnasota. On paper, it was a valuable business model. However the cleanup of his sites is still being paid for by US taxpayers today and arsenic has contaminated nearby rivers and water supplies. Somewhere along the line, we’ve forgotten what value really means, thinking only that if we can get it quickly and cheaply, then we are well served.
We can change that though. By taking a few moments to think about what value really means when we make decisions inside organisations. Or, outside them, when we give them feedback, open our wallets and make choices about the products and services that we make a part of our lives.
Coffee Capsule Photo by Andrés Nieto Porras [CC BY-SA 2.0 (https://creativecommons.org/licenses/by-sa/2.0)]