Paper Capsules on the Highly Competitive Coffee Market

The capsule protects the coffee from oxygen – and thus ensures the quality of enjoyment. The disadvantage: 5 to 6 grams of ground coffee, individually packaged for each portion, causes a lot of waste – regardless of whether the capsule is made of aluminum or plastic.

Deutsche Umwelthilfe (German Environment Help) estimates that 3.4 billion capsules are used in Germany every year – a mountain of waste amounting to 13,500 tons, including aluminum capsules such as those used by Nespresso. Capsules that are compatible with the market leader’s machines are currently very popular. According to Jacobs manufacturer JDE, this segment “still has great potential for retailers to attract additional sales to the food retail sector”, referring to Nespresso’s own distribution system.

Nespresso commissioned its own studies on the sustainability aspects of its well-known aluminum capsules. But now brand owner Nestlé is bringing paper capsules into play. They will be available in six varieties throughout Germany starting in the beginning of 2025. Initial tests are currently underway. The products have already been available in Switzerland and France since 2023.

The new capsules are likely to appeal primarily to environmentally conscious consumers. Nespresso will continue to use aluminum capsules in the future, but wants to offer a “further choice”, reports the Lebensmittelzeitung.

A draft of the EU packaging regulation originally envisaged a ban on coffee capsules. The current form, which is expected to be voted on in mid-November, only requires a percentage of recycled plastic to be used. “There will be no mandatory recycled content for aluminum capsules,” says Anna Kupferschmitt from Allianz Verpackung und Umwelt.

A few years ago, it looked as if the waste problem could be solved by using compostable bioplastics. However, the product solutions used at the time do not decompose quickly enough in composting plants, and  it has, therefore, no longer been possible to dispose of them in the organic waste garbage can since 2021. This also applies to the new capsules by Nespresso. They consist of 82 percent paper pulp and a protective layer of biodegradable plastic as an oxygen barrier. Nestlé has also introduced a similar system under the Nescafé Dolce Gusto brand with the Neo range, using paper-based, home-compostable capsules instead of the plastic usually used here. These are available in Switzerland, France, and Portugal, for example.

In addition to Nestlé, other manufacturers are also positioning themselves to benefit from a potential increase in demand for compostable capsules. The My Coffee Cup manufacturer Unicaps has been on the market since 2017. Its sustainable Nespresso-compatible products are available at Rewe, dm-Drogeriemarkt, online and in the B2B business, among others. Following an investment by the packaging and logistics company Schoeller Group, Unicaps says it wants to expand internationally.

Unicaps had previously developed the capsule further technologically and integrated a high oxygen barrier. The new capsule is produced using microorganisms from plant material such as food waste and consists of the biopolymer PHA, which is biodegradable.

Competitor Minges also has a Nespresso-compatible paper capsule in its range. “Four years ago, you needed thick green glasses to like the compostable capsule,” Managing Director Ulli Minges told LZ. “Today, the quality in terms of oxygen barrier and shelf life is on par with that of a plastic capsule.” The company offers organic coffee in home-compostable capsules under the Minges and Alvorada brands. “This combination is a good niche,” says Minges.