BRAZIL – Nestlé has announced plans to invest 1 billion reais (US$196.5 million) in Brazil by 2026 to ramp up production capacity and expand out-of-home sales of its Nescafe lines, focusing on attracting younger consumers.
The multinational corporation aims to position the Nescafé brand as a platform for higher value-added products, which are experiencing rapid growth in the Brazilian market.
Initially introduced in Brazil to market instant coffee, the Nescafé brand now boasts a diverse product range tailored to meet the evolving preferences of younger consumers seeking novel coffee experiences.
Valeria Pardal, head of Nestlé’s Cafe Nestlé brand, emphasized the shifting landscape of coffee consumption in Brazil, characterized by an increasing demand for premium coffee options.
Pardal highlighted the company’s commitment to elevating the quality of coffee consumption, particularly among younger demographics.
A significant portion of the investment will be allocated to expanding out-of-home consumption channels, primarily through the business-to-business segment.
Nestlé aims to double the number of out-of-home coffee machines to 44,000 within four years, reflecting its strategic focus on catering to evolving consumer behaviors.
Nestlé anticipates robust growth in Nescafé sales within Brazil’s retail market, projecting an annual growth rate of up to 15 percent over the next four years, surpassing the general market growth forecast of 5 percent to 6 percent.
“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,” Pardal said, adding that young people are a key segment for the firm.
According to Nestle’s observations, the surge in coffee consumption among individuals under 24 has been ten times higher than among other consumer groups
Pardal noted the emergence of new consumption patterns, including the popularity of iced coffee and flavored coffee beverages, reflecting a broader shift towards viewing coffee as a source of enjoyment rather than solely as a stimulant.
Nestle’s investment initiative in Brazil follows its commitment to inject R$6 billion (US$1.2 billion) into the market by 2025 to bolster existing business segments, leverage new technologies, and expand manufacturing capabilities.
With over a century of presence in Brazil, Nestle remains the largest purchaser of certified Brazilian coffee, underscoring its enduring commitment to the region’s coffee industry.
Nescafé’s progress report
Recently, Nescafé released its second Nescafé Plan 2030 progress report. According to the report, over 20% of Nescafé’s coffee was sourced from farmers implementing regenerative agriculture practices in 2023.
The report shows increased adoption of regenerative agriculture practices, contributing to improved farm yield, and reduced greenhouse gas (GHG) emissions.
Philipp Navratil, Head of Nestle’s Coffee Strategic Business Unit, reaffirmed the company’s commitment to ensuring the long-term sustainability of coffee production through collaborative efforts with partners, suppliers, and farmers.
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