Global food conglomerate, Nestle is expanding its investment in the coffee segment as it sees growing consumer appetite for premium and wider varieties of coffee in the country.
Jiang Haiying, Senior Vice President of Nestle Greater China Region and Head of the Coffee Business Unit highlighted the growth potential of the coffee segment which has led to Nestle’s growing commitment to expand its coffee business in the mainland.
Jiang added that Nestle will pursue “bigger, fewer and better and more focused innovation projects”, targeting cutting-edge trends in Chinese consumer behavior and coffee consumption to drive the next wave of expansion.
Nestle’s global coffee business achieved 5.1% growth annually. Coffee consumption in China alone has jumped 167% over the past decade, reaching 350,000 tons. The market has shifted from being dominated by instant coffee to a more diversified landscape, with freshly brewed coffee and retail coffee emerging as core segments. Nevertheless, instant coffee remains relevant due to its convenience, though it now faces pressure from both on-premise and retail coffee.
Coffee players like Nestle need to be innovative, proactive and able to offer holistic value in terms of taste, health benefits to emotional connections with the product. Nestle currently leads the instant coffee segment in China due to its aggressive marketing and wide product portfolio. Other major instant coffee drink brands in China include JDE Peet’s, the Saturnbird Coffee, and Trung Nguyen Group Corp.
Recently on 17 April, Nestle launched a coffee concentrate with a coconut flavor, blending rich coffee taste with tropical refreshments. iResearch report also identified coffee concentrate as the fastest growing segment. Nestle has also expanded its RTD coffee line with new flavors such as the osmanthus longjing latte and coconut latte, designed to appeal to consumers in outdoor and mobile settings.
Coffee is now no longer enjoyed just as a beverage in China, but it also able to emotionally connect with consumers via its functional benefits, not to mention its popularity at certain occasions.
