After Casino and Sara Lee (through its subsidiary Maison du Café) entered the playfield and began to compete with Nespresso, Nestlé decided to counter-attack and to sue Sara Lee.

Sara Lee has already sold more than 10 millions capsules in France and this success jeopardizes the Nespresso monopoly. But what is Nestlé really afraid of ? Is it to share a little part of its monopoly, or is it to see its competitors kill its business? I’m favouring option 2 … Sara Lee and Casino are commoditizing the product and killing 10 years of efforts on Nespresso to associate a social status symbol to it. The thereat is literally to dramatically lower margins and to create a low-tier product.

Actually, think of Senseo and Nespresso. Which of the two does, in your mind, has the highest “value”?