Nespresso Bets on Penelope Cruz

Brand Doubles Down on TV Ads

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Nespresso is doubling down on TV, with a new campaign featuring Penelope Cruz.

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The coffee brand first began running TV ads in the U.S. earlier this year, as it sought to capitalize on the hype surrounding the fast-growing single-serve coffee market. At the time, it made a conscious decision to steer clear of celebrity endorsements despite the fact a campaign featuring George Clooney has been popular overseas.

"We started out the beginning of this year [trying to] increase brand awareness, while at the same time reinforcing the Nespresso experience of high quality in the comfort of your own home," explained Franz Niedermair, VP-marketing at Nespresso USA. "Now we are excited to move into the second phase, using a celebrity that not only lets us stay true to our European heritage, but epitomizes the elegance and sophistication the brand stands for."

Execs are hopeful Ms. Cruz will resonate in the same way Mr. Clooney has overseas, and they say they are spending accordingly. Mr. Niedermair declined to comment specifically on budgets, though he said the plan is to "increase advertising pressure in primetime" for the spots featuring Ms. Cruz. In the first nine months of the year, Nespresso spent $12 million on measured media, according to Kantar. In 2011, the brand spent just $40,000 on measured media. Interpublic's Martin Agency handles creative for the brand.

"We're happy with the campaign, and experiencing higher growth now," said Frederic Levy, Nespresso USA President. The brand, overall, has been growing at a double-digit clip, according to parent company Nestle.

The company is also ramping up its retail presence, opening new Boutique Bars in San Francisco and Los Angeles, as a result of the success it's seen this year. By the end of the year it will count 21 Boutique Bars in the U.S. The bars offer an opportunity for customers to purchase products and test -drive machines, Mr. Levy said.

In the new spot, which begins airing Tuesday, Ms. Cruz specifically highlights cappuccinos and lattes made with fresh milk, a tactic meant to appeal to Americans. Mr. Levy says 80% of espresso consumption is done with milk in a larger cup in the U.S. It's the opposite in Europe, where espresso with a little sugar and no milk in a smaller cup is preferred.

The single-serve coffee market has become incredibly crowded and competitive in recent years. Nespresso was a first mover in the space-first offering its machines about a decade ago-but companies like Starbucks, Green Mountain Coffee Roasters and Lavazza are all now playing in the space.

"We welcome the competition," said Mr. Levy. "Single-serve is booming in the U.S., and competition is increasing the size of the category."

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