April 18, 2015

We Bought a Nespresso CitiZ with Milk Frother in Limousine Black and It Is Fantastic

Nespresso CitiZ with Milk in Limousine Black

Nespresso CitiZ with Milk in Limousine Black

We added a Nespresso CitiZ with Milk Frother in Limousine Black espresso machine to the office lineup – and we are loving it.

After seeing my new nephew at the hospital two or three hours after his birth, Aaron and I took one of my parents’ cars and headed over to the Country Club Plaza in Kansas City.  We had a few things to do but after stopping in Tiffany & Company, we went to Williams-Sonoma and watched a demonstration of the Nespresso CitiZ with Milk Frother.  I first read about this espresso machine in the Nestle stockholders report back when I decided to add Nestle to the KRIP portfolio whenever it became more attractively valued.

The Nespresso CitiZ espresso line fascinated me and even though we have the Douewe Egberts coffee machine from the Netherlands, the Technivorm Moccamaster (also from the Netherlands), and the Starbucks Italia Digital espresso machine, I wanted to buy one anyway because I have a deep, passionate love for good coffee.  The reviews from other Nespresso owners were nearly flawless.  Plus, my affection for Nestle – even if it is too richly priced based upon earnings, in my opinion – just gave me one more reason to buy it.

After sales tax, the total came to just shy of $400 and based upon the first few rounds, which included a vanilla caramel latte, a caramel cappuccino, an iced peppermint macchiato, and straight shots of espresso, it has been totally worth it. Even my mom gave it rave reviews and she is just as particular about her coffee as I am.  I totally, unabashedly, and unequivocally recommend the Nespresso CitiZ with milk frother if you want to make lattes, espresso, cappuccinos, and macchiato at home in a matter of minutes.

The Nespresso Coffee Pod System (Nespresso Grand Cru Coffee)

There are several secrets to the Nespresso CitiZ success.

Nespresso Flavor Discovery Coffee Pods Box

Once you find the perfect coffee by choosing among the Nestle lineup of various coffee roasts, you order them directly from the company. The total cost per drink is around $0.65. By my estimates it would take around 150 coffee drinks to pay for itself compared to going into Starbucks, plus you get the convenience of making it at home.

First, the coffee comes in a dozen or so pods that must be purchased directly from Nestle.  Each pod has its own roast, flavor profile, and color.  These are referred to as Grand Cru and there are currently 16 different choices from which you can choose.

Tonight, after several coffee drinks, I popped in a Grand Cru called Cosi, which is fruity, light and lemony.  It immediately took me back to college when several of my friends worked at Small World Coffee in Princeton, New Jersey.  The description: “Cosi is a lightly roasted espresso, with high typicity and a refreshing acidity.  The combination of the finest East African Arabicas imbues this blend with a characteristic hint of lemon, which is balanced by the mildness of Central and South American Arabicas.”  It tasted nothing like the others and because that scent, flavor, and experience is so deeply intwined with my past, it made me incredibly happy.

To order, you become a member of the Nespresso club, create batches of Grand Cru shipments you desire, pay for them, and have them delivered to your office or home.  It will take me a couple of days to figure out exactly which of the Nespresso Grand Crus are my favorite but this is just a wonderful experience when I’m in the mood for espresso-based coffee drinks instead of regular drip coffee (which is not what the Nespresso CitiZ does).

Second, the milk frother allows you to make hot or cold drinks with two different whisk attachments.  The Nespresso CitiZ actually heats or chills your beverage to help you reach the ideal temperature.  I’m normally a hot espresso coffee drink guy and Aaron normally prefers iced or colder drinks, meaning we can both get what we want without any hassle, changeover, or extra effort.

  • FratMan

    I’ve been reading Andrew Kilpatrick’s ‘Of Permanent Value’ that goes into extensive detail about Buffett’s investments during his Buffett Partnership years, and he talks a lot about investments that he calls ‘workouts,’ and in recent years, ‘cigar-butt stocks’ because they have only a puff or two of value left in them. Well, I guess my question for you is this, and I don’t you’ve mentioned it on your blog yet, but–how do you evaluate trash? I mean, the old Ben Graham adage is ‘On what terms and at what price?’ so even if the company is junk, it eventually has to become attractive at some price, doesn’t it? The most egregious example of this in the past couple of years has been the big banks. The balance sheets of Bank of America and Citigroup are a pandora’s box of garbage and maggots, I get that, but surely, there is a price at which they would become attractive invesments. If you’re looking at a jenky company, at what point does it become worth sinking your own money into? Surely if Citigroup (pre-split, or heck, post-split for the purpose of this question) and Bank of America were trading at a nickel a share tomorrow, you’d be a buyer? So how do you decide at what point it becomes worthwhile? 

    • Joshua Kennon

      I just avoid most of those situations entirely.  That is my philosophy.  There are so many easy ways to make money these days if you have a mind for opportunity, and Graham was working in the aftermath of the Great Depression when otherwise decent companies sold for less than the cash they had in the bank.  I take his philosophy and modified it for my own purposes, looking at investing as the process of buying the most profit possible for the lowest price conducive with my morals and values.  I’d rather make 10% running a great, easy business that can grow over time and keep up with inflation than hope for a 12% return from a terrible business.  In truth, the good business, if it is that good, is going to do better, anyway, over the long-run and God knows our private businesses have vastly exceeded both of those rates of return.  The point for you is that if you are looking at a 20+ year holding period, a company’s return is going to mirror, very closely, the return on equity with any overpayment or underpayment getting averaged in and becoming less and less important.  

      Part of this is my life philosophy.  I like it when business is fun, challenging, and enjoyable.  Good businesses are fun.  Higher sales and profits are fun.  Frustrations and headaches are not, though I’m more than capable of dealing with them.  I’d rather go the enjoyable route so I can spend my nights thinking about books, video games, new recipes, new investments, or travel instead of chugging Pepto-Bismol.  Even if I could get it at a 25% discount, I’m not sure I’d ever buy, say, a service station in my hometown because it is a hard business with tiny margins and a lot of frustration.  The utility of the discount is overweighed by the time and emotional commitment necessary to “fix it”.