Coffee: the race for pods and capsules shows no sign of slowing down, and Nestlé is branching out with the Neo system
In terms of value, the pod and capsule sector is now worth 1,580 million euros, up 11.2 per cent in 2025. The new system aims to complement, rather than replace, the existing range
The Italian market for single-serve coffee is experiencing double-digit growth and is reshaping the geography of domestic consumption: between 2022 and 2026, the volume of capsules rose by 41.6 per cent, that of coffee pods by 134%, whilst ground coffee lost 13.1 percentage points of market share, falling from 67.5% to 54.4% of total consumption by cup, with a 16% decline in volumes over the five-year period. This is confirmed by the analysis by Circana carried out for Nescafé Dolce Gusto.
In terms of value, the coffee pod and capsule sector is now worth 1,580 million euros, up 11.2 per cent by 2025, according to the latest “Coffee Pods and Capsules” report by Competitive Data.
It is against this backdrop that Neo is being launched – the new system with which the Nestlé Group brand is seeking to gain momentum in a segment that is already on the move.
According to the latest survey by YouGov, coffee has achieved a penetration rate of 86 per cent amongst Italian households – 22.6 million households have purchased it at least once, the highest figure in the last three years. The frequency of purchases is also rising, from 10.5 to 11 times a year between 2021 and 2025, as is the average household expenditure, from around 59.5 to over 81.8 euros per year over the same period. In terms of equipment, ownership of capsule machines reached 50.6 per cent of households in the fourth quarter of 2024, an increase of 2.9 percentage points on the previous year; 26.4 per cent, meanwhile, own a dedicated pod machine.
Growth in the Dolce Gusto system is already measurable: market penetration has exceeded 3.5 million Italian households, a figure that places the brand in second place in the single-serve system market, according to Paolo Ongari, Business Executive Officer for Coffee Italia Malta. The increase, adds Vittorio Grazzani, Business Unit Manager for Nescafé Dolce Gusto, “is around 200,000–300,000 households a year”.
It is against this backdrop – characterised by ‘rituals that endure and technologies that evolve’ – that Neo is introduced, presented as a range designed to complement, rather than replace, the existing offering.
