Nestle SA is preparing for post-COVID-19 pandemic coffee growth as the world’s largest food company rolls out touchless machines for the office and bets new flavors would win over more consumers making coffee at home.
The maker of Nespresso and Nescafe is planning a wider introduction of machines that can be controlled via smartphone, catering to concern about viral transmission, head of coffee brands David Rennie said in an interview.
Coffee was one of the motors of Nestle’s sales growth last year and makes up the bulk of the company’s US$24 billion beverage business.
Following a lukewarm introduction of Nespresso in the late 2000s, Nestle has made some bolder steps to boost its US coffee business in the past few years. The company splurged US$7.15 billion on a partnership with Starbucks Corp in 2018, and now makes the coffee chain’s products for at-home use worldwide.
That was a boon during the pandemic, when consumers were more likely to use Starbucks capsules in a Nespresso machine than take a walk to a cafe.
As vaccination drives bring the prospect of post-pandemic life in view, Nestle is eyeing opportunities to expand in offices while trying to keep stoking at-home demand with new capsules and types of soluble coffee.
“As people return to offices, they may not be going back in the same numbers as pre-COVID,” Rennie said by telephone. “In-home consumption will continue to grow.”
Rennie said he sees big growth prospects in China, where average consumption of coffee is at just seven cups per person a year. Nestle opened almost 900 Starbucks counter locations in China last year as the country recovered from lockdowns faster than other countries.
India and Africa are also priority markets for expansion, Rennie said.
Contactless coffee machines are being rolled out globally, with introductions in Russia and China in coming weeks.
The US overtook France as Nespresso’s biggest market last year, and Rennie said there is still room for growth there as capsules and soluble coffee become increasingly in vogue.
Cold and flavored coffee would be a focus there this year, with iced tropical coconut coffee and other flavors being introduced.
“The good thing about the US market is that it’s very big,” said Rennie, who was promoted to Nestle’s executive board this month in a sign of coffee’s importance at the Vevey, Switzerland-based food company. “We’re still a relative newcomer there.”
While Nespresso boutiques would remain a key part of the brand’s strategy, the increased importance of e-commerce means the company would look at optimizing its store network, which counts 816 boutiques in 76 countries, Rennie said.
The company sees the global coffee market growing 4 to 5 percent by value in the next few years as people gradually return to office and to their old coffee drinking habits, Rennie said.
That means green coffee needs could expand 2 percent by volume.
Nestle’s coffee sales rose 5 percent last year, adjusted for acquisitions and currency shifts.
There is steady growth in coffee, although the out-of-home segment could take two to three years to return to pre-pandemic levels, Rennie said.
For the global coffee market, “the challenge is making sure that demand and supply are kept in balance and we expect they will be balanced.”
With an approval rating of just two percent, Peruvian President Dina Boluarte might be the world’s most unpopular leader, according to pollsters. Protests greeted her rise to power 29 months ago, and have marked her entire term — joined by assorted scandals, investigations, controversies and a surge in gang violence. The 63-year-old is the target of a dozen probes, including for her alleged failure to declare gifts of luxury jewels and watches, a scandal inevitably dubbed “Rolexgate.” She is also under the microscope for a two-week undeclared absence for nose surgery — which she insists was medical, not cosmetic — and is
GROWING CONCERN: Some senior Trump administration officials opposed the UAE expansion over fears that another TSMC project could jeopardize its US investment Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is evaluating building an advanced production facility in the United Arab Emirates (UAE) and has discussed the possibility with officials in US President Donald Trump’s administration, people familiar with the matter said, in a potentially major bet on the Middle East that would only come to fruition with Washington’s approval. The company has had multiple meetings in the past few months with US Special Envoy to the Middle East Steve Witkoff and officials from MGX, an influential investment vehicle overseen by the UAE president’s brother, the people said. The conversations are a continuation of talks that
CAUTIOUS RECOVERY: While the manufacturing sector returned to growth amid the US-China trade truce, firms remain wary as uncertainty clouds the outlook, the CIER said The local manufacturing sector returned to expansion last month, as the official purchasing managers’ index (PMI) rose 2.1 points to 51.0, driven by a temporary easing in US-China trade tensions, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The PMI gauges the health of the manufacturing industry, with readings above 50 indicating expansion and those below 50 signaling contraction. “Firms are not as pessimistic as they were in April, but they remain far from optimistic,” CIER president Lien Hsien-ming (連賢明) said at a news conference. The full impact of US tariff decisions is unlikely to become clear until later this month
Nintendo Co hopes to match the runaway success of the Switch when its leveled-up new console hits shelves on Thursday, with strong early sales expected despite the gadget’s high price. Featuring a bigger screen and more processing power, the Switch 2 is an upgrade to its predecessor, which has sold 152 million units since launching in 2017 — making it the third-best-selling video game console of all time. However, despite buzz among fans and robust demand for pre-orders, headwinds for Nintendo include uncertainty over US trade tariffs and whether enough people are willing to shell out. The Switch 2 “is priced relatively high”
RSS