Instant coffee is a household staple, with 73% of UK consumers drinking it daily. Nestlé's Nescaffe dominates the market with 43% market share and the majority of volumes sold. Looking for new ways to expand coffee consumption at home, Nestlé developed Nespresso. Nespresso is just as convenient as Nescaffe, but uses freshly ground coffee individually packaged in pods to make a hearty single-serve espresso. To use the pods, a special Nespresso coffee machine is required. From the moment they purchase a machine, the consumer becomes part of the Nespresso club. The pods are then sold to club members either in high-end Nespresso boutiques or online. This convenient premiumization of coffee is a growing market. In fact, between 2010 and 2012 it was the fastest growing segment of the UK coffee market, growing by over 50% in value and volume. Nespresso has always been the market leader in coffee pods in Europe, starting to develop its system as early as the 1970s and continuing to innovate today. However, with the end of patents on their unique system last year, their monopoly on this niche market will also end. Already, the firm is feeling competition from newcomers like CafePod which manufactures its own pods compatible with Nespresso machines. The following discussion will explore how trust, entrepreneurship and constant innovation have shaped Nespresso and what this means for the company's future. As previously mentioned, Nespresso was first developed in the 1970s, but it was not until 1986 that a wholly owned Nestlé subsidiary, Nespresso SA, was established. The idea behind the product is simple: a two-part system, with a machine and a capsule designed for ease and convenience. The aluminum capsule contains 5g...... middle of paper ......s having prior authorization. His attitude, coupled with a strong commitment to the brand that ensured he was acting in the company's best interests, helped Nespresso innovate. It is interesting to note here that even though the principal (Nestlé senior management) had asymmetric information about the activity of the agent (Gaillard), the results were advantageous. Sebastian Raisch talks about Nespresso in his article "Balanced Structures: Designing Organizations for Profitable Growth", explaining: "The entrepreneurial culture helped it scale faster and promote innovative ideas such as the 'club concept', which represented Nestlé's first direct marketing experience and played a key role in Nespresso's success. Therefore, it can be argued that the manager's lack of knowledge helped foster an entrepreneurial work environment where innovation could thrive..