If you're like most people that I know here in the US, you probably are not very familiar with the Nespresso brand and may not have even heard the name before. According to a recent article in Business Week ("Nespresso Pitches 'Luxury' Coffee for Lean Times," 3/24/09), though, if you're one of the many Starbucks drinkers who are cutting back on your latte-dollars, that may be about to change. Personally, I see a major flaw with this article's promise – a flaw that I thought would be worth explaining by showing that what has driven Nespresso's business forward may in fact be of little interest to Starbucks consumers.

While Nespresso's current US expansion does offer Starbucks customers a better value for similar, if not better quality, extremely, the factors that will matter most to Nespresso's success have very little to do with Starbucks. Instead, the success of the brand in the US will depend in large part on the willingness of consumers to adopt a more flexible attitude towards home-brewed espresso than they have in the psat.

Nespresso's push comes at an interesting time given Starbucks' recent sales slump and closing of stores. The irony is that both brands are marked as premium brands and yet, as a home brewed (and therefore less expensive) product, Nespresso is said to be in a position to capture the very same consumers that Starbucks is losing. As the aforementioned Business Week articles quotes Nespresso Chief Executive Richard Girardot, "People still want little daily luxuries, but there's a return to consumption at home." In that sense, Nespresso's timing could not seem better for an aggressive push into the US market. The bigger question then may just be not whether it will succeed but rather, at what level and in what sense.

That many in the US have not heard of Nespresso is intriguing, considering it sells far more than its single serve espresso machines and pods worldwide ($ 1.7 billion) than any of its pod system competitors, including Senseo ($ 547 million), Tassimo (approximately $ 300) million) and Keurig ($ 254 million). That's because with 90% of it's sales coming from Europe, Nespresso has not yet established its name here in the US in the same big way that those brands have.

The US has always been a much tougher market for Nespresso: consumers tend to prefer coffee over espresso and, when deciding to splurge on an espresso machine, many Americans would assume that to achieve the full authentic experience of a European-style espresso or cappuccino coffee , one must buy the espresso coffee or beans itself, rather than order them in pre-packaged pods.

In many ways, Nespresso is no different from any of those other competitor brands – they all dispense coffee in a pod. The difference is that while each of these companies' machines primarily focus on coffee in its simplest form, Nespresso's machines only dispense espresso, marketed as the very best quality, based on the technology of the machine (operating at a higher pressure than other machines) and the carefully selected varieties of beans. Nespresso's machines do come at a higher cost at an average of $ 200 versus the $ 80 that it costs for a Keurig machine, but extremely, at .55 per pod, its price per cup is about the same price as a K-cup – only, like Starbucks, the product offers a sense of luxury within reach.

Another interesting difference, though, is the way in which Nespresso is sold. Unlike its competitors, Nespresso has built its business almost exclusively on its own high quality reputation, through sales on its website and in company-owned boutique stores, rather than through third party retailers and channels. To develop that reputation, everything that Nespresso does is meticulously designed to communicate a level of quality far above anything else. Its sleek machines, "grand cru" coffee variants, high-end design boutique stores, the glossy magazine it sends to all its "Nespresso Club" members and its vip-like customer service all work together to drive new users to the brand and cultivate an extremely loyal following. The net result: Nespresso's laser-like focus on delivering a premium customer experience turns something that most of us take for granted as a routine part of our day into something special, almost aspirational. And, as Nespresso has demonstrated, when you create something that people really like, the product practically sells itself.

Remember Gmail in its early days when you had to be referred by someone else in order to get an account? Remember when you could only buy an Apple computer or ipod in an Apple store or through its website, before they began selling their products in other stores like Best Buy? This is the same model that Nespresso has adopted … and so far, it seems to be working.

So how far can Nespresso take its business in the US? The answer is more complicated than would appear on the surface. Yes, there is a clear opportunity to poach Starbucks consumers who enjoy indulging in lattes, cappuccinos and espressos. But, to do so, Nespresso may need to overcome a fundamental coffe lifestyle culture chasm that exists between the US and Europe – a gap that, if directly addressed through changes to the company's machines themselves, may not play to Nespresso's strengths or best interests. ..

This culture gap is rooted directly in our daily rituals. For Europeans, espresso and cappuccino consumption is a daily ritual, whereas in the US, it is an indulgence not meant to replace our daily utilitarian coffee habit. So, in the US, a purchase of an espresso machine would probably be additional to a kitchen that already has a coffee-brewer, rather than as a replacement for the coffee brewer. For many, having two coffee-dispensing machines on one counter would simply be one machine too many. Given the trade-off, my guess is that most would decide against buying the espresso machine. I know people who have considered a Nespresso machine but decided against it based on this very same calculus. As a result, while Nespresso may appeal to some Starbucks customers who like the idea of ​​a less expensive latte brewed at home, it may also find that those same customers consider the addition of an espresso machine to their home to be equally unnecessary, at least as it relates to their daily coffee ritual.

Therefore, in the short term, the only way that Nespresso might seriously threaten both the Keurigs and the Starbucks types of competitors here in the US would probably be for it to develop a machine capable of dispensing premium espresso blends as well as regular coffee, a model that both Senseo and Tassimo have already adopted. But doing so would be a mistake: Nespresso's single focus on espresso coffee enables it to drive home its premium focus in a way that regular coffee, no matter how good its quality, can not. So, my guess is that as a premium-focused brand, that approach is not part of Nespresso's plans, at least not any time soon.

The initial upside of Nespresso's push into the US may be limited to a more limited population of consumers who prefer espresso coffee over regular coffee for their daily ritual. However, in the long run, Nespresso's focus and emphasis on quality will drive its growth for years to come and will also potentially excite interest in the brand and product from traditionally more coffee-minded consumers. We have seen other companies such as Starbucks shy away from their premium image in order to appeal to wider audiences, a move that has arguably come at a great deal of risk to the company's future.

Opening more of its concept stores in the US may not catapult Nespresso above other household brand names such as Starbucks or Keurig, but it will help provide a showcase for the ultra-premium qualities of the brand that it has worked so hard to develop. If considering single-cup coffee brewers such as Keurig as part of its competition, Nespresso may never dominate the category here in the US..but ultimatley, I'm not so sure that is the point.