Keystone
As the coffee market evolves, Nestlé is keen to tap into the rising popularity of cold coffee beverages. With innovative products like a new espresso concentrate designed for home use, the company aims to capitalize on this shifting trend.
Nestlé has recently introduced an espresso concentrate for cold coffee drinks in Switzerland, positioning itself to benefit from the growing demand for “cold coffee.” The company’s competitor, Jacobs, has also released a coffee concentrate, while Emmi’s “Caffè Latte” range has been a hit in the cold coffee segment for over two decades.
According to Nestlé, the company identifies this trend as a significant growth opportunity. “What started as a movement in coffee shops has become a widespread phenomenon, especially among Generation Z,” stated Guillaume Savoy, Head of Coffee at Nestlé Switzerland. The trend has seen notable momentum, particularly in Asian markets.
Every third coffee cold
Nestlé reports that approximately one in three coffees served in cafes globally is now cold. Notably, around 75% of the coffee drinks sold by US chain Starbucks are cold variants.
The company aspires to facilitate the cold coffee experience at home with their new product category. Currently, just 11% of Swiss consumers prefer cold coffee. However, that figure rises to 30% among those under 35.
This segment appears economically advantageous for Nestlé, as industry insiders suggest that convenience products typically yield higher margins compared to traditional instant coffee options for home consumption.
Nestlé also notes that the lines between coffee and other beverage categories are increasingly blurred. These concentrates can be combined with milk, soda, or even fruit juice. “It’s not just about coffee,” Savoy commented.
Consumption at home is growing faster
While at-home coffee consumption remains lower than that of coffee sold outside the home, it is experiencing much faster growth. Previous figures from Nestlé indicate that the global coffee market is valued at around 455 billion Swiss francs, with an expected annual growth rate of approximately 4% until 2030.
In 2024, the home coffee market surged by 7%, reaching a value of 105 billion Swiss francs. In contrast, the larger out-of-home market, encompassing restaurants and coffee shops, only grew by 2%, approximately hitting 350 billion francs.
The coffee and powdered beverages sector constitutes about a quarter of Nestlé’s total sales, which amount to nearly 90 billion francs. The company aims to focus on fewer but more substantial innovations, with the new coffee concentrate for home being one of its key growth initiatives.
Key Takeaways
- Nestlé acknowledges a significant shift toward cold coffee drinks.
- The company has introduced an espresso concentrate for home use.
- Cold coffee orders in cafes worldwide now account for one in three sales.
- This trend is particularly prominent among younger consumers.
- At-home coffee consumption is growing faster than out-of-home consumption.
- Nestlé sees cold coffee as a viable new growth segment.
FAQ
What is Nestlé’s new product?
Nestlé has launched an espresso concentrate designed for making cold coffee drinks at home.
How has the demand for cold coffee changed?
Cold coffee orders now make up about one in three sales in coffee shops globally.
Who is driving the cold coffee trend?
The trend is primarily driven by younger consumers, particularly Generation Z.
How does at-home coffee consumption compare to out-of-home?
At-home coffee consumption is growing at a rate of 7%, while out-of-home consumption is growing at only 2%.
In summary, Nestlé is strategically positioning itself to capitalize on the growing interest in cold coffee beverages. With new products tailored for home preparation and a keen eye on evolving consumer preferences, they are set to make significant strides in this burgeoning market.
