Coffee is cultural, and Canada is home to a lot of cultures.
While some have deeply rooted java traditions and tastes, others are just warming to the versatile brew.
“Think of another beverage that you can have hot or cold, black or white, sweet or bitter, with all the flavours and varieties we have today,” says Nespresso Canada president Carlos Oyanguren. “That’s what is amazing about the category, and that’s what we do at Nespresso; tailor to all the different varieties of consumption.”
Perhaps nobody has a better understanding of how coffee is consumed differently around the world — and how all those preferences, rituals and flavours dovetail into Canada’s cultural mosaic — than Oyanguren.
The Mexico-City born and raised industrial engineering major landed his first job at Nestle nearly 20 years ago, and has worked on the global brand’s coffee portfolio ever since. After six years in Mexico Oyanguren moved to the multinational’s headquarters in Switzerland in 2009, where he served as a marketing adviser for Latin America, Africa and the Middle East. Then in 2012 Oyanguren moved to Beijing after being named director of coffee marketing in China, before returning to Switzerland as Nespresso’s global communications manager in 2016.
Oyanguren returned to his home country in 2017 to serve as the market director of Nespresso Mexico. Six years later he was asked to oversee a less populous country with a much larger coffee market — the brand’s third largest after the U.S. and France — and moved to Canada in September of 2023.
The pod-based, at-home brewing system was patented by Nestle employee and Swiss engineer Eric Favre in 1976, with the first machines hitting the market a decade later.
Since entering Canada in 2006 Nespresso has grown to include 1,000 employees, 36 boutique locations, a robust e-commerce offering and a rapidly maturing business-to-business operation.
The Star recently caught up with Oyanguren remotely from Nespresso Canada’s head office in Montreal to discuss the evolution of the traditional beverage, why the fight against climate change is a matter of survival for the industry, some new flavour combinations on the horizon, and how our numerous cultures make Canada a unique place to serve a cup of joe.
How did you go from studying industrial engineering to a career in marketing?
I’ve always been very analytical, and I was interested in manufacturing, so I studied industrial engineering. There were some marketing classes that were optional, and I never chose them, because I had the wrong impression of what marketing was. I thought it was just about making advertisements.
When I joined Nestle over 20 years ago, I entered a one-year program where I would rotate through all areas of the business, from manufacturing and commodity buying to marketing and sales, to really understand the company. That allowed me to see how marketing connects a lot of what’s happening inside the company. One of the good things about this profession is that you’re always learning, because the market is always moving, and consumer needs are always evolving.
Have you always been a coffee drinker?
I was a very amateur coffee drinker.
Most of our customers learn how to drink coffee at home, but my parents almost never drink coffee. When I joined Nestle and started working for Nescafe I started to drink coffee, and since then it’s been a journey of discovering different kinds of coffee. Like many consumers, I started with milk and sugar, but now I would say I’m on the other side of that spectrum, with more black, shorter coffee.
What have you learned about how coffee is consumed around the world?
I went from Mexico to Switzerland to China, back to Switzerland, back to Mexico, and eventually Canada, so I’ve seen the category from many angles.
In some markets, like China or Africa, it’s still establishing itself. Consumption is low, people are still discovering it, because like me, they don’t have a generation of parents showing their kids how to drink coffee. So, they are learning with friends, at universities, at coffee shops, and it’s a very different environment.
How popular is coffee in Canada?
It’s massive. People love coffee, and there’s very high consumption per capita. It’s a very important part of daily routines. Canada is a very important part of Nespresso’s operations; one of the most important in the world.
What is also unique about Canada is the diversity. Even the type of immigration you have here in Quebec is different from out West. For example, we have very important plans for the Lunar New Year in Vancouver that we don’t emphasize as much here. But Quebec consumers drink more espresso because of that European influence, so it’s different how you market it, how you train your teams, which machines they prefer, and how you personalize the retail experience. So, you can find different Canadas within Canada, and that’s very exciting to work on.
How do you reach all those different customers?
We have 36 boutiques in Canada, but we also have a business that is very e-commerce driven. A lot of our consumers start at the boutique to discover unique flavours and varieties, and as they become more regular users they move to e-commerce, where it’s easy to replenish their supply. Those customers that shop across different channels tend to be more loyal and longer-term customers.
We also have a growing presence in the institutional channels, like restaurants, hotels and offices. In terms of size, it’s not as big as retail, but it’s the fastest growing segment we have in Canada, and it’s a different business model.
How so?
We have specific products that are tailored for that environment, because you need to have a machine that can do a lot of cups per day, and more cups at a time, that’s reliable and easy to use.
We have large commercial machines that have a fridge in the middle where you can store milk, a touch screen display, multiple milk frothers, and can store hundreds of used capsules. With more businesses trying to bring people back to the office, great coffee can be a great incentive. We’re seeing a mindset shift, and the brand is well positioned in Canada to capture it.
Are you also looking to expand your retail and online presence?
We have plans for a couple of retail openings this year. What we normally do is a small format pop-up — and we have a couple of pop-ups already around the country — to test the location. Depending on that, we may move to a more permanent, bigger boutique. And because of our e-commerce data, we can see where people are shopping from, and that gives us a nice indication of what cities or markets we should be looking at.
In terms of e-commerce, we have plans to enhance our app, which is half of our online transactions, and we’ll bring new functionalities this year. We’re also pushing ourselves to deliver faster, and more sustainably, and you’re going to see shorter delivery times and lower carbon footprint deliveries.
Why is sustainability important for the brand?
We are a B Corp Certified company, and we take it very seriously. Our business depends on the quality of our coffee, and we need to ensure we have enough high-quality coffee to meet the need in the future. It’s not about green washing; it’s about ensuring the long-term viability of quality coffee.
A big part of that has to do with recycling. We chose aluminum for our capsules because it keeps out oxygen, which is the enemy of coffee quality, and because its infinitely recyclable. The aluminum is melted down and given a second life, and the coffee grounds are used for compost or biomethane.
Most capsules are made of 80 per cent recycled aluminum, and we are making it as easy as possible for consumers to recycle them. When we deliver new capsules to your home we take the used ones, and in some places — like Quebec, British Columbia, and as of last year, London, Ontario — you can put them in a green bag and drop them in the recycling bin. We’re now working with our partners to expand that program.
We’re also extending that circular economy to the machines. In April we launched a refurbishing program called RELOVE, so that machines that are broken can get fixed and put back into the market and sold at specific boutiques and online at a 20 per cent discount.
How are Canadian tastes evolving?
I could spend an hour just talking about that.
Last year we launched a Canadian-driven innovation, not just in Canada but around the world: maple pecan flavoured coffee. That was a huge success, and that will be coming back. There’s also an important trend in terms of vanilla, and you’ll see more of that, too.
We also have a lot of customers asking why we don’t have more decaf flavoured coffees, and you’re going to see us deliver those for the first time in a couple of months. It’s a simple but powerful innovation that combines two products that are out there separately.
Another one is cold coffee. If you look at it today compared to just a couple of years ago, it’s amazing to see the evolution of that category. We’ll be playing with more limited editions and new flavours, and I won’t spoil the surprise, but we’re developing many of these flavours so that they can also be prepared cold.
We’re discovering that cold coffees skew more towards flavoured consumption than the warmer varieties, so expect more flavour and cold combinations, because those go really well together.
