Nestlé continues coffee growth in FY2023

It follows the same upwards trajectory seen for the portfolio over the past few years. Nestle’s coffee portfolio includes brands Nespresso, Nescafe and Starbucks; plus chocolate malt beverage Milo: with the portfolio making up 26.7% of Nestle’s sales.

Premium power: Nespresso

In 2023, Nespresso was recognized as one of the top 100 most valuable brands in the world, according to Interbrand’s annual rankings.

And brand Nespresso enjoyed 5.3% organic growth in FY2023, benefiting from its premium positioning and the continued growth of the Vertuo system. (Launched in North America in 2014, the Vertuo system is designed to cater for North American preferences of larger coffees over the European espresso style, and has since expanded to global markets).

Furthermore, Nespresso has seen strong growth in the out-of-home channels (such as hospitality and business settings) with further adoption of the Momento system, particularly in the office segment.

The brand has often come under fire for its use of aluminum single-use capsules: which, although recyclable, don’t always succeed in making it from consumers’ coffee machines into the appropriate recycling stream. To this end, Nespresso launched its first paper-based home and industrial compostable capsule in France and Switzerland in the spring of 2023, which are compatible with Nespresso Original machines.

Several aspects of the capsule feature proprietary technology, such as a biopolymer lining inside the capsule that protects the coffee against oxidization.

The capsules are certified for composting, both home and industrial, by TÜV Austria, an international certification body.

In France - which is ramping up efforts for compulsory composting - capsules are accepted in public biowaste bins.

Other innovations for the Nespresso brand include the ultra-premium Nº 20 limited edition, a unique arabica variety.

Nescafé: creating new coffee occasions

Nestlé sees particular opportunities in India for Nescafé: saying it is using the brand to lead the creation of the coffee category and market in a country that has been traditionally focused on tea.

That includes a particular emphasis on creating coffee occasions among younger consumers.

With a focus on at-home consumption, the brand has introduced its coffee to more than 30 million Indian households in the past seven years – with 10 million consumers added in 2023 alone.

In the country, Nescafé roasts Indian green coffee beans, tailoring the final product to cater for local taste preferences at the Nanjangud roastery.

Thanks to strategic positioning, Nescafé is increasingly available and easily accessible across the country in three million retail outlets.

While centered as a soluble coffee brand, innovations in Nescafé (such as RTD coffee) have helped the brand succeed in markets such as North America.

And in Vietnam – a large coffee producer and exporter with a rich coffee culture – Nescafe is growing the availability of ready-to-drink and ready-to-serve options in response to emerging trends.