Can At-Home Café Brews Fill the Coffee Shop’s Cup?

cup of coffee, Blue Bottle and Nespresso

You wake up on a lazy Saturday morning, and instead of rushing out the door to your favorite coffee shop, you simply stroll into your kitchen. With a bag of coffee beans on hand, you can easily brew your favorite cup of Joe, all while wearing your pajamas. The convenience of brewing coffee at home is hard to beat.

In 2010, Starbucks recognized the power of this and introduced its line of at-home brewing options. And just 10 months after this launch, Starbucks announced that it had achieved a milestone, surpassing the $100 million mark in global sales for its at-home brew products.

At the time, Starbucks reported that 55% of Starbucks customers surveyed enjoyed it at home, 25% at work, and the remaining 20% while on the go, making Starbucks home brew options a convenient way to enjoy the brand anytime.

As of today, Starbucks has reported a total revenue of $35.016 billion for the 12 months ending June 30, which encompasses revenue from various sources, including coffee brew sales.

With these promising outcomes in mind, Blue Bottle Coffee, a brand established by James Freeman, a struggling clarinet player who launched a $700 million brand using $15,000 in credit card debt, is venturing into the realm of home brew options for its customers. This endeavor is being realized through a partnership with Nespresso.

In a Thursday (Oct. 5) press release, the brands announced the release of Blend No. 1, a limited-edition mild coffee blend crafted from a combination of beans sourced from Ethiopia and Uganda that was specifically designed to be compatible with Nespresso’s Vertuo machines. The collection will be available to customers at Nespresso boutiques worldwide beginning Oct. 6, and the product is set for a full-scale launch on Oct. 18.

Why the Collaboration Makes Sense  

With this team-up, instead of launching at home options on its own, Blue Bottle can tap into Nespresso’s established customer base and appeal to an audience that Nespresso has already nurtured.

Additionally, it allows the brand to diversify its product line to capture different segments of the coffee market, catering to various consumer preferences.

For Nespresso, the collaboration means capturing the attention of a different audience that Blue Bottle has already cultivated — a younger audience. In the past, Nespresso successfully introduced its affordable and visually appealing Vertuo Pop machines, broadened its range of iced coffee options and forged a partnership with Starbucks to create a limited-edition blend earlier this year.

The move is also timely as more consumers are trading down and finding more ways to still enjoy little luxuries but on more of a budget.

Nestlé, the multinational food conglomerate that owns Blue Bottle and Nespresso, highlighted in a presentation during Bernstein’s Pan European Strategic Decisions Conference in late September that consumer spending on food and beverages is been declining since the beginning of the year.

“People are consuming less. Are they eating less? Are they wasting less? Are they eating more out of home? Difficult to know,” Nestlé EVP, Chief Financial Officer François-Xavier Roger said at the event. “I don’t think that it will last but let’s not forget that we do operate in slightly declining markets by volume, which did not happen that much in the past.”

Grocery stores are also witnessing consumers scaling back due to economic challenges. As an example, retail titan Kroger has observed budget-conscious shoppers reducing their spending and opting for more cost-effective product choices.

“The effects of sustained inflation, reduced government benefits including SNAP [Supplemental Nutrition Assistance Program] and higher interest rates have pressured customer spending, especially for those on a tight budget,” Kroger CEO Rodney McMullen told analysts on an earnings call earlier this month. “These customers are buying in smaller pack sizes, [at] times prioritizing the lowest shelf price, … building smaller baskets and switching to lower-priced items to stretch their budgets.”

Read more: Grocery Shoppers Not Only Trade Down but Now Cut Back


Corporate Delinquencies Reach Highest Rate Since 2017

business loans, delinquencies, banking

Corporate delinquencies are reportedly at the highest rate they’ve reached in eight years.

The delinquency rate for loans from U.S. banks to both U.S. and foreign companies rose to 1.3% at the end of 2024, a figure that was the highest since the first quarter of 2017 but well below the 5% seen during the 2008 financial crisis, the Financial Times (FT) reported Monday (Feb. 17), citing data from BankRegData.

The total amount of bank debt on which U.S. business borrowers were at least one month late reached $28 billion, up $2.2 billion from three months earlier and up $5.4 billion from a year earlier, according to the report.

The report attributed the rise to interest rates that remain high, surprising some observers who expected them to fall this year. A pickup in inflation in January and concerns about the impact of President Donald Trump’s proposed tariffs have delayed further interest rate cuts by the Federal Reserve, the report said.

Corporate bank loans tend to be variable rate, so the expected decline in interest rates would have given some relief to borrowers, the report said.

The data from BankRegData does not include loans from direct lenders and private credit funds, per the report.

It was reported in January that the growth in commercial bank loans was at the slowest it’s been since the wake of the 2008 financial crisis.

Commercial bank loans grew by around 2.7% in 2024, which was only somewhat faster than the 2.3% rise seen in 2023.

A number of bankers said they hoped to see loan growth later this year, citing optimism among clients and other indicators.

Bank of America said during a January earnings call that commercial loans were up 5% year over year in the fourth quarter and that loan and deposit growth in the current year should outpace last year’s.

J.P. Morgan Chase said during a January earnings call that there has been improvement in business sentiment and that balance sheets at small businesses are healthy.

Citi CEO Jane Fraser said during a January earnings call that in the United States, “growth is not only being driven by the higher-end consumer but also by a strong and innovative corporate sector.”