In the coffee map of Nestle China, the role of instant coffee is becoming more and more important.
“We started to do instant coffee business (Nestle China) about 12 years ago. Now China should be the largest market of instant coffee business of Nestle in the world.” He Wenlong, senior vice president of Nestle’s coffee business in Greater China, told xiaoshidai today. This is somewhat surprising, because although the growth rate is good and the number of people is large, compared with the mature coffee market, China is still not a big coffee consumer.
He Wenlong also pointed out that in the past, Nestle China only relied on instant coffee to start consumers’ first cup of coffee. Now, instant coffee has become an important magic weapon to drive consumers into the coffee market.
“In the future, we will launch this” first cup of coffee “through different categories, different forms and different channels to recruit more new coffee consumers.” He said.
He Wenlong, senior vice president of Nestle’s coffee business in Greater China, was present at the new instant coffee product communication meeting held today
Today, the coffee giant announced the launch of a new ready to drink product: Nestle coffee ready to drink silky latte series. The new flavor of “spring Limited cherry blossom shufulei latte” will be launched in March 2021. Xiaoshidai learned that nestle recently established a product innovation center focusing on liquid drinks and dairy products in Qingdao Laixi, which is one of the first batch of new products developed and launched.
At the new product communication meeting held today, he Wenlong, senior vice president of Nestle’s Greater China coffee business, Peng Zhixin, head of Nestle’s Greater China instant coffee business, and others had a detailed exchange with xiaoshidai. They also talked about the user recruitment strategy, product innovation ideas, distribution cooperation with Yinlu and channel layout of “the first cup of coffee”.
Now, snack generation will take you to understand.
“The first cup of coffee”
“For us, the biggest strategic role of instant coffee is to recruit new users.” He Wenlong told xiaoshidai that many consumers also began to contact coffee from Nestle’s ready to drink products, so as to gradually cultivate their habit of drinking coffee. “I think instant coffee is a very important strategic part of the coffee journey.”
He believes that ready to drink coffee is very suitable as an entry-level product. “First, it is often a (flavor) drink. Many products are not pure black coffee, which will be more acceptable to many consumers who drink coffee for the first time. Second, it’s portable. Third, its price is reasonable and acceptable. This provides a relatively low threshold for consumers to become coffee drink users. “
New products of Nestle coffee ready to drink series: spring Limited cherry blossom shufulei Latte
Take the smooth latte of Nestle’s ready to drink coffee series as an example, he said that this product does not have strong coffee bitterness in taste and is suitable for recruiting new drinkers. Therefore, he Wenlong described that instant coffee plays the role of “the first cup of coffee”, and it is also the first step for Nestle to start the coffee culture. “We will not limit our investment here.”
Later, Peng Zhixin added that instant coffee will be placed next to all other drinks, which is also conducive to recruiting beverage consumers to become new coffee drinkers. “Originally, the consumer wanted to have a coke today, but when he saw the new instant coffee product nearby, he might be willing to try it.” He said.
Xiaoshidai learned from Nestle China that at present, instant coffee and ready to drink coffee account for almost the same proportion in the company’s overall coffee business, with “average contribution”.
In recent years, China’s ready to drink coffee market is also heating up. Euromonitor International data shows that the domestic ready to drink coffee market in 2021 is expected to exceed 14.9 billion yuan. In this segment of the market, Nestle has a leading edge. According to Nielsen’s offline survey data, Nestle’s ready to drink coffee market share is more than 50%.
Nestle coffee ready to drink Serie Latte
However, last year, due to the impact of the epidemic on the channels outside the home, the business of Nestle’s instant coffee products was also affected in the short term.
“Our school access is particularly important. Many schools did not open in the first half of the year. In addition, the convenience store channel was also affected. But most consumers will buy online, so our e-commerce is developing very fast. ” He Wenlong told xiaoshidai that in the second half of last year, the instant drink business “soon recovered.”.
Taste and experience
If the classic taste such as latte is suitable for “novelty”, then the taste of new products launched this time is more to provide “freshness” for existing consumers.
According to reports, this new spring product combines “Cherry Blossom fragrance and shufulei dessert flavor” in taste innovation. “As a key sales season for ready to drink coffee, every spring Nestle’s latte series will create different tastes and bring fresh experience to consumers.” Nestle said that last spring, Nestle coffee lattes launched a “cherry plum flavor.”.
When it comes to how to capture consumer taste trends, he Wenlong said that in addition to doing consumer research and blind testing, Nestle coffee will also get inspiration from social media, other businesses, such as the popular tastes of candy and chocolate, and overseas trends. For example, many consumers like to drink coffee with desserts, which inspired Nestle coffee to add “shufulei” desserts to its new products.
Xiaoshidai noticed that nestle recently established a product innovation center focusing on liquid drinks and dairy products in Qingdao Laixi, and Sakura shufulei latte is one of its first new products.
“We used to have an innovation center in Xiamen Yinlu, focusing on the research and development of instant coffee, Yinlu peanut milk and Nestle instant tea. Because (last year) our business with Yinlu has undergone some adjustments and entered a new cooperation mode, we have adjusted the innovation of instant coffee to Qingdao. ” Peng Zhixin told xiaoshidai.
He added that the product innovation center in Qingdao will cover all of Nestle’s liquid drinks, such as instant coffee, as well as liquid beverage customer solutions for professional catering.
Sakura shufulei latte artists co name Sakura peripheral objects
It is worth noting that in addition to taste, Nestle coffee’s ready to drink product innovation began to pay more and more attention to “derivative experience”.
For example, in order to create a “sense of atmosphere” of cherry blossom in spring and bring social topics, this new product also cooperates with Japanese illustration Association Gold Award artist Kane darang, including the design of “beautiful and infectious” product appearance, the creation of limited peripheral gifts of Cherry Blossom series co branded by artists, and the creation of cherry blossom season interior design in subway and supermarket.
Cooperation with silver heron
On the issue of ready to drink, the coffee giant believes that its biggest opportunity now lies in distribution.
“AC Nielsen data show that there are 600 outlets in Chinese mainland, and we are only covering some of the stores. So, how to open up new markets in the channel, I think this is our biggest challenge, and it is also a part that we need to continue to work hard. ” He Wenlong said.
At present, the ready to drink products of Nestle coffee are mainly distributed by silver heron.
“Before Nestle acquired silver heron many years ago, both sides were partners. Now we are still close partners.” He Wenlong told xiaoshidai that first, Yinlu continues to produce Nestle’s ready to drink coffee on a contract basis; second, Yinlu distributes Nestle’s ready to drink coffee in 12 provinces.
Xiaoshidai said that in November last year, Nestle group announced the sale of Yinlu peanut milk and Yinlu canned eight treasures porridge in China. The transaction included all the shares of Yinlu food group’s five enterprises in Fujian, Anhui, Hubei, Shandong and Sichuan. Meanwhile, as part of the deal, silver heron will continue to process and produce Nestle coffee ready to drink coffee products for Nestle and distribute them in most regions of Greater China.
According to he Wenlong, expanding offline channels is still the top priority. “Of course, the whole retail industry is also changing. We are also observing this. But back to the source problem, if we want to cultivate coffee consumption culture and habits, we still need to experience it through physical experience. We need to get consumers to try, to drink, and then to like our products and brands. ” He said.
Later, when communicating with the snack generation, Peng Zhixin added that in terms of distribution, Nestle’s ready to drink coffee products have a high penetration rate in hypermarkets and supermarkets, “but the traditional small shops with the largest number in China are the parts that we need to strengthen.”
At the same time, the coffee company is adapting to new channel changes.
“Affected by the epidemic, we have seen some changes in the channels. Because consumers are less likely to go out, have fewer meals outside, travel less, drive less to high-speed stations, and so on, people’s consumption will shift more from outdoor channels to o2o and e-commerce channels. Therefore, we have increased investment in o2o and e-commerce. ” Peng Zhixin said that channel expansion is a long-term focus of Nestle coffee ready to drink products in the future.