Nespresso Index

The caffeinated version of the Big Mac Index.

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What if global Nespresso capsule prices can tell us about the over or undervaluation of currency and how expensive is a country anyway? Enter, the Nespresso Index. A fun way for coffee lovers to talk about money, and see where can one score some cheaper Java.
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Nespresso Index gallery image
Nespresso Index gallery image
Nespresso Index gallery image
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Koby Ofek
Maker
Hey, This is kind of niche, but may interest some people in this community. Nespresso Index is the caffeinated parallel of the Big Mac Index. It is mainly a fun research project-turned-website measuring the relative strength of currencies, and purchasing power parity (PPP), by comparing the local prices of Nespresso capsules across the world.  What can you do with it? 1. Draw interesting macro-economic data 2. Find where in the world you can get more affordable Nespresso capsules if you are a consumer of the brand, traveling abroad often, or have family/friends that can deliver to you 3. Calculate how much can you save when ordering/buying abroad. This is strictly non-commerical project. No affiliation or buying links. It's just for your information, education and entertainment.  Some further details: - What I do here is to compare the local prices of Nespresso capsules in their respective currencies, with the exchange rate of the same currencies. Purchasing Power Parity theory claims that the difference between those two ratios can project an over or under valuation of the currencies.  - I collected data from about 80 markets where Nespresso is active, the current exchange rate (updated in 20 minutes intervals), and I compare them. - I also collected the most recent Big Mac Index data, to compare how this new indicator is doing in comparison to its burger older sibling.  - As I have a lot of data, one can also look up where in the world, certain capsules are sold for more or less money. There are all kind of caveats with the process, the main one being is that there are limitations in checking for PPP by comparing just one product. I give a complete account of the project, and you can read more about it in the medium article I linked above. If you want to geek out further about Nespresso or coffee pricing, or the Index, or where in the world one can get cheaper coffee, feel free to hit me here or elsewhere. 
Koby Ofek
Maker
I guess it makes sense to ask this in this context: Have you heard about the Big Mac Index?
Ron Ishai
Looks good though a bit rough around the edges. Two questions: 1. How are you planning to monetize this? 2. What's the idea behind making a website from this? I have some usability notes and questions about your data sources too. I'll DM you via twitter.
Koby Ofek
Maker
@ron_ishai Thanks for asking. The very first idea I had about monitoring Nespresso capsule pricing was when people in a local coffee fans Facebook group, started complaining about the capsules prices. People were saying that we pay so much more than in other countries for the same product, and whenever one is abroad, she should bring some over with her. I'm not a heavy Nespresso consumer (though I do own a machine) and I usually take my coffee from third-wave coffeeshops or brew at home manually. However, the trend piqued my interest. I started to collect data from all over the world about Nespresso pricing, and the differences are staggering. In Israel, where I live, a basic capsule is more than 50% more expensive compared to France, for example. The USA is, apparently, also very expensive, as are some other middle eastern countries. Any geek with data at hand wants to do something with it, so I created a quick app to display the prices and calculate how much can one save by buying your capsules in a different market. That was when I thought of another comparable product that is also sold globally, and that looking at its pricing data has an interesting use case. That was the Big Mac and the Big Mac Index. While there are a lot of differences between these two products (the most apparent one may be that the Big Mac is a common product and Nespresso is perceived by some as a 'semi-luxury brand'), I thought it might be a good idea to try to create a sort-of Nespresso Index that tries to measure almost the same thing as the Big Mac Index - something called PPP, or purchasing power parity. I won't go too deep into the theory (and I'm not an economist by any means) but the claim is that two currencies are at an equilibrium once a basket of good costs the same taking into account the exchange rates. When there are differences, you can estimate that a currency is over or under valued against another currency. You can read more about my attempt to decipher the data at the Medium article I wrote about the data collection and its significance. As for monetization, well, it's not the goal here. This one is just for fun and I hope people will find it useful for discussing coffee at the dinner-table, or, if you are Nespresso consumers, find where to get your capsules more affordably.
Roger Wolf
I have no idea about the economics part, but the table with price comparison is useful
Achi Ram
I'm not sure I follow your calculation about the US Dollar being over valued against the British coin. However, we consume 6-8 capsules of Nespresso every day and it costs a fortune. I had no idea that you can buy them at a discount in other countries. Noted. Thanks.
Koby Ofek
Maker
@achi_ram That's actually a great use case for the product! I posted this on reddit too, and everybody were going - this can save me a tons when I'm buying capsules. I guess that's the power of data for you. You collect it for one thing, and people find other uses for it. That's also why I added the savings calculator to make it easy to see how much can you save when buying pods abroad.