Mondelez Sees 25% Growth in Europe Tassimo Coffee Pod Business

Mondelez International Inc. (MDLZ), the snacks and coffee business spun off from Kraft Foods Inc. this week, expects sales of its Tassimo coffee pods to grow about 25 percent in Europe this year.

Growth for the year-to-date has been around that level and “we’re looking forward to continue at least that growth rate” for the full year, Hubert Weber, president of the company’s coffee business, said in an interview in Zurich.

The company has broadened the range of beverages for the Tassimo system, introducing flavoured lattes and chai latte, and is expanding into new markets such as Russia and South Korea. Mondelez is also considering the introduction of Tassimo in China. Increased competition is helping to boost market penetration for single-serve coffee in Europe, Weber said.

“We are very happy with Tassimo -- it is this year the fast-growing single-serve system in Europe,” Weber said.

Single-serve coffee has a market penetration of about 20 percent in Europe and that could grow to between 40 percent and 50 percent in the next five years, he said.

“We are looking at the opportunities still in the big coffee-consuming markets in Europe and then step-by-step we are looking also at geographic expansion,” Weber said.

While a coffee-shop culture exists across much of Europe, more consumers are choosing to have coffee at home and they want it to be of similar quality to drinks they have when out, according to Weber.

The original Kraft Foods Inc., founded in 1909, has become two companies -- Mondelez International and Kraft Foods Group, the North American grocery enterprise.

To contact the reporter on this story: Dermot Doherty in Geneva at ddoherty9@bloomberg.net

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net

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