Interview: 'Sustainability not a trend but a biz imperative,' says Nespresso SG marketing lead

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Sustainability has become one of the main priorities for many companies, with brands such as L'Oréal, DBS, McDonald's and Grab pushing into this space with various initiatives. Singapore, for example, has a Green Plan 2030 which seeks to advance the country's national agenda on sustainable development, and Malaysia also recently pledged to become a carbon-neutral country by 2050 at the earliest. A global McKinsey survey done in April this year said that while environmental issues such as climate change create business opportunities and risks, about two in five respondents say they expect their companies to generate value from sustainability.

That said, brands need to remind themselves that sustainability is not a trend, but a business imperative, Nespresso Singapore's head of marketing, Peilin Lee (pictured) said. "Finding the intersection of business strategy, operational feasibility and relevancy to consumers ensures a brand is genuine and consistent, and not measures that merely scratch the tip of the iceberg," she told MARKETING-INTERACTIVE, adding:

Commitment to making a difference, and consistent actions of digging deeper to find solutions for tough issues, are what differentiates brands in this space.

For Nespresso, sustainability is not a new agenda. In fact, the journey began as early as 1991 when it launched a recycling system for its capsules in Switzerland. Since 2007, the company's operations have been carbon neutral and Nespresso is now moving towards a new ambition to have "every cup of Nespresso" be carbon neutral by 2022. Lee added that sustainability is a business imperative for Nespresso, and a core part of its strategy, since inception.

Since 2014, Nespresso has spent over SG$730 million on various sustainability programmes, recycling schemes, and efforts on agroforestry. "The bulk of our sustainability spends are on operational costs covering the entire spectrum of our recycling programme", said Lee. This included the recycling plant, the picking up and delivery of the coffee capsules, and its marketing initiatives such as "One Pod at A Time" to build awareness.

When asked how sustainability ties in with Nespresso's overall brand values, Lee said high-quality coffee and sustainability are closely interlinked. Other than providing coffee lovers with aromatic and rare coffees, Nespresso also protects the landscape and livelihoods of the farmers. Ensuring that each cup of coffee is "Made with Care", Nespresso explores the human care invested in every step of the value chain - from the coffee cherries to minimal waste, the regions the company works with to revive coffee agriculture and the traditional hand-crafted processes preserved.

According to Lee, the company has seen "encouraging shifts" in environmental perceptions of the brand and is continuing to champion industry-first changes. Last year, the company changed the composition of its capsules so that they could be produced from 80% recycled aluminium. Lee added that it aims to have all its consumer capsules made from recycled aluminium by the end of 2021.

peilin coffee farm 1

A global survey by McKinsey done earlier this year showed that companies seek customer inputs on the sustainability attributes of their products and services and highlight those attributes in their marketing efforts. This is especially evident in value creators (59%) compared to other companies (37%). McKinsey defines value creators as companies that exhibit a strategic, purposeful approach that differs from that of other companies in several ways. In Nespresso's case, Lee said she sees marketing’s role to be a thought provoker to help consumers take meaningful actions. The marketing team constantly communicates with consumers to ensure they know why, where and how to recycle and participate in a more circular practice.

For example, the company established its own recycling network to collect used capsules from the brand's club members and Nespresso Professional partners. Working with a local recycling plant to separate used coffee grounds from the aluminium capsules, the used coffee grounds were donated to local farms to make nutrient-rich compost to grow vegetables from and the aluminium was repurposed to products such as coasters, pens, and bicycles.

However, Nespresso required the participation of its customers to make this initiative a success. Hence, its programme One Pod at A Time resulted from that thought, to communicate that every customer can make a difference and that their last sip of coffee does not mean it is last use. "We also have regular activations where we reward customers for returning their used capsules," Lee said.

For Singapore, in particular, while there are recycling bins nationwide, the culture of recycling is still not as huge as compared to the West. To encourage recycling in Singapore, Nespresso regularly gives customers the chance to win prizes made from reused aluminium, such as a bicycle made from 300 recycled Nespresso capsules. It also collaborated with contemporary artists such as Red Hong Yi, who created an art installation titled Kaleidoscope, from 24,000 recycled Nespresso capsules. It also has a roving sustainability exhibition that showcases the infinite possibilities of recycling each capsule.

"These circular benefits are only possible when consumers actually recycle their capsules and we continue to strive to make this as convenient and innovative as possible, through our marketing efforts," Lee added.

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Targeting all walks of life with sustainability initiatives

Instead of focusing on a single demographic, Nespresso aims to create awareness for its sustainability efforts among all its coffee drinkers. Broadly, there are two groups of consumers - individuals who are aware of climate change and would like to take action, and those who are not active. For the latter, the company has attempted to make recycling easy with home pick-ups or drop-offs at the boutiques alongside its "One Pod at a Time" programme. This strategy for its target audience extends to the Gen Z community which Lee calls "ambitious and trendy" and want to see more, do more and feel more.

Gen Z grew up with various coffee chains in their surroundings, from Starbucks and Coffee Bean to Dunkin' Donuts. They have also grown accustomed to and the convenience of buying a cup of coffee while on their way out. According to two reports from Datassential, “Appealing to Young Coffee Drinkers Along Their Maturity Path” and “Millennials: The Language of Coffee & the Role of Sustainability”, it shows that the younger generation are a finicky group of conscientious consumers who have deeper emotional connections to their coffee experiences than their generational predecessors. Just Gen Z alone, 43% of the consumers from this generation read labels, and an experience to go along with their coffee.

To engage this group of individuals who typically seek new experiences and elevated experiences, Nespresso has been launching limited-edition coffees every month to bring in new flavours and experiences. These flavours include Ispirazione, Ispirazione Novecento and Ispirazione Millennio.

At the same time, Nespresso also collaborated with Italian entrepreneur Chiara Ferragni to raise mindshare among Gen Z. Through the partnership, Ferragni transformed some Nespresso machines and accessories with her iconic style for fans that like her bold colours and vibrant design. Nespresso also actively engages Gen Z on social media to share its initiatives surrounding campaigns and KOL collaborations.

Sustainable marketing during the pandemic

The transition from physical, event-focused initiatives to social media and virtual platforms of connection been the biggest change for its marketing plans, said Lee. The changing consumer behaviour has also impacted the company's marketing campaigns. When the pandemic hit in 2020, it marked a reboot of the relationship that people had with their homes and workplaces.

With more people at home showcasing their newly discovered culinary skills via social media, the company pivoted its approach to launch Barista Creations in 2020 to tap into this trend via the lens of a "home-Barista" and decided on an Instagram-run campaign titled #BaristaRelay. The campaign aimed to help coffee lovers expand their coffee creativity with unique coffees that embody the notes of popular desserts like vanilla éclair and crème brulee. The campaign resonated with the consumers and the capsules were sold out a few weeks later.

As more consumers are embracing digital methods in their daily lifestyle routines, Nespresso believes that digital innovation is one way in which it could draw consumers closer to the brand and build stronger relationships. The company has launched a function on its mobile website, where consumers could use AR to envision how the Nespresso coffee machines will look like in their respective kitchens. While Lee did not specify the pandemic's impact on Nespresso's marketing budget, she said digital has been a key component of its marketing strategy as it is a digitally-driven brand. "Hence, our spends have been consistent on digital platforms, prior to the pandemic as well," she added.

Nonetheless, the pandemic has been "an eye opener" for Lee, who said her three biggest takeaways were resilience, safety-first and being a force for good. While 2020 threw many curveballs at the company, Lee was proud of her team's ability to adapt and pivot at furious speed. Aware that the pandemic has raised concerns among the public regarding the issue of safety, the team came up with numerous interactive ideas to bring coffee tasting and coffee creativity to life. Prioritising the safety of its staff and customers, Nespresso also created virtual launches and recipe videos via Nespresso One Academy.Lee said:

When things are uncertain and situations seem bleak, the best way to get clarity is to go back to your brand's purpose and figure out how we can authentically be part of a solution.

In this instance, Nespresso chose to quickly pivot how the company could continue to safely provide coffees to its consumers by expanding the delivery fleet and entertaining people at home with home recipes.

Aside from the consumers, the pandemic has also impacted client-agency relationships, forcing the company to adapt in ways that were not considered before. It is currently working with Publicis for social duties, Neo Media World for media, and iris Worldwide for PR. According to Lee, regular and clear communication was even more imperative now that in-person communication is minimised. Feedback had to also be articulated more clearly in the absence of facial cues, while continuously checking for mutual understanding. "Resilience has become more important, in the face of multiple changes brought about by vague guidelines, and uncertain situations," she added.