Nestlé plans to invest 1 billion reais (€180 million) in its Brazilian Nescafé market by 2026 as it tries to tap into surging demand, it was reported today.
Executives told Reuters that the company is looking to expand production capacity and out-of-home sales of its Nescafé lines, targeting younger consumers.
It aims to consolidate the brand as a vehicle for higher value-added products, which are rapidly growing in the country.
First created in Brazil, the Nescafé brand today has a broader range than its original instant coffee.
The label is hoping to capture the attention of customers who are increasingly younger and want new “experiences” with their coffees.
They are also looking for consumers who would pay more than they normally would for a traditional cup, according to executives.
‘Something New For The Market’
The head of Nestlé brand Café Nestlé Valeria Pardal said, “We are at a time of expanding consumption of premium coffee, and that is making coffee consumption more sophisticated in Brazil.
“Brazilians have four to six cups of coffee a day, which is a lot, and our mission is to make sure those cups are of higher quality.”
The company will direct part of the investments into expanding out-of-home consumption.
Nestlé will mainly do this through the business-to-business segment, as the company expects to double its number of out-of-home coffee machines in four years to 44,000.
Over the next four years, Nestlé expects Nescafé sales to grow by up to 15% per year.
This outpaces the 5% to 6% growth it forecasts for that market in general.
Consumption among people under 24 has been 10 times higher than among the rest of the consumer groups, Nestlé said.
“This is something new for the market,” Pardal said.
“They drink iced coffee, coffee with cream, coffee with caramel.
“We used to say that coffee was a stimulant, today we say that coffee is a cup of pleasure.”
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