When your Favorite Drink Comes Out of the Capsule

In the highly competitive coffee market, every penny counts. Green coffee has become much scarcer in recent months and prices have climbed noticeably. In addition, trade disputes and competition lawsuits are also making headlines in the coffee industry.

Against this backdrop, marketing and sustainability campaigns by brand manufacturers are becoming increasingly important. Nespresso, Nestlé's premium coffee brand, is drawing attention to its new paper-based capsules with effective advertising. According to the manufacturer, the capsules in the “Paper-based Collection” consist of 82 percent paper pulp, supplemented by a biodegradable protective layer that is supposed to guarantee a good coffee aroma right up to the point of preparation. Consumers can dispose of the capsule in their home compost after use. If you do not have a compost bin, you should dispose of the capsule in the yellow garbage can and not in the paper or organic waste garbage can.

Aluminum Capsules Remain

However, the product innovation is not intended to be an exit from the previous aluminum capsules, the company explains. Nestlé describes the capsules as the best possible form of packaging when it comes to preserving flavors and ensuring shelf life and quality.

In addition, the aluminum capsules are made from at least 80 percent recycled material and can be recycled at home via the yellow bag or the yellow garbage can, according to the company. The company estimates that around 52 percent of capsules in Germany are recycled in this way.

With the new paper capsules, the brand not only wants to offer customers an alternative, but also to appeal to new groups of buyers: those who prefer packaging made from renewable raw material. The Group is also differentiating itself from its competitors with new products.

Amount of Waste Causes Criticism

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 serving, creates a lot of waste. Environmental associations therefore remain fundamentally critical of coffee capsules. According to a survey by Deutsche Umwelthilfe (DUH), more than three billion of these capsules are consumed in Germany every year. The coffee capsules from Nespresso are “the proverbial peak of Nestlé's packaging waste mountain”. That is way the DUH awarded Nestlé the “Golden Vulture” negative prize in 2024. According to DUH calculations, Nespresso capsules generate almost 40 grams of packaging for every 100 grams of coffee, which is almost twelve times more packaging waste than brewing coffee with a standard 500 gram packet of ground coffee.

Market with Potential?

In addition to Nestlé, other manufacturers are also positioning themselves to benefit from a possible increase in demand for compostable capsules. Capsules that are compatible with the machines of market leader Nespresso are in particularly high demand. According to the Tchibo Coffee Report, 19 percent of German households already own a capsule machine.

The „My Coffee Cup“ manufacturer Unicaps has been on the market since 2017. Its Nespresso-compatible products are available at dm and in the B2B sector, among others. Following an investment by the packaging and logistics company Schoeller Group, Unicaps says it wants to expand internationally. Together, the companies want to promote the sale of a new compostable capsule made of bioplastic. This can be produced from food waste using microorganisms and composted under certain conditions. The business model involves offering the capsule solution to international coffee manufacturers.

The new capsules from Unicaps are certified for disposal in both home and industrial compost. In Germany, however, this regulation does not apply: coffee capsules - even those made from bioplastics - may not be disposed of in the organic waste garbage can. They decompose too slowly. However, coffee capsules from the Migros brand CoffeeB, which are also garden-compostable, can be disposed of in organic waste.

Competitor Minges also has a Nespresso-compatible paper capsule in its range. The company offers organic coffee in home-compostable capsules under the Minges and Alvorada brands. The NatureCups capsules can also be composted at home. Packaging manufacturer PAPACKS has launched plastic-free, compostable capsules on the market, in collaboration with Euro-Caps, a provider of private label coffee capsules. The companies received the World Packaging Award in 2024 for their efforts. According to the manufacturer, CoffeeB from Migros subsidiary Delica can be disposed of in organic waste. The coffee portion is packaged in alginate based on brown algae and other plant-based substances.

At the moment, the sustainable capsules are not yet generating much turnover in the price-sensitive German coffee market. Only a few compostable capsules can currently be found on retail shelves. Private label capsules are still mostly made of plastic.

By Anna Ntemiris, editor