we talked with the bosses of Nestle coffee business in Greater China.
From the office workers of “coffee renewal” to “liuhuanghong boys and girls”, coffee giant Nestle is aiming at different segmentation scenarios and needs, and accelerating the expansion of its product matrix. The protagonist of this “new trend” is black coffee.
The snack generation learned that on the eve of 618, Nescafe launched 7 series and more than 20 new products at one go, and comprehensively increased the size of black coffee, involving instant, ready to drink, concentrated liquid, ear hanging and coffee beans.
Behind this is the outstanding growth momentum of black coffee in the Chinese market. According to Nielsen data, in China’s solid packaged coffee market (including instant coffee, caramel coffee, coffee beans, etc., but excluding instant coffee), the sales of black coffee surpassed that of mixed coffee in 2021.
Hewanlong, senior vice president of coffee business in Nestle Greater China, made a speech at the communication meeting
At the communication meeting, he Wenlong, senior vice president of Nestle Greater China coffee business, Wang Lei, vice president of Nestle Greater China Omni channel food retail and e-commerce, and zhaoxuemei, director of Nestle coffee China communication and innovation, talked about the coffee consumption trend behind this “big move” and Nestle’s product matrix strategy.
Let’s listen to the latest ideas of this coffee giant.
“Black coffee” is favored
In the Chinese coffee market, black coffee seems to be selling better and better.
According to Nielsen research data quoted by Nestle, combined with offline and online channels, in China’s solid coffee market, the sales of black coffee exceeded that of mixed coffee in 2021, with a year-on-year increase of 59%, and the market share of sales jumped to 52%; Just a year ago, black coffee accounted for only 40% of the sales market, lower than 60% of mixed coffee.
The sales of black coffee surpassed that of blended coffee in 2021 (picture source: Nestle coffee; data source: Nielsen)
“In terms of the consumption trend of the whole coffee category, we have observed that there are four main directions, namely, health, high-end, experience and localization. Among them, the growth of black coffee is very prominent. The driving force behind it is that it is regarded as a health drink. In addition, we can use it to make our own personalized tastes.” Zhaoxuemei tells xiaoshidai.
From the perspective of sales, the performance of different channels varies greatly.
Wang Lei pointed out to the snack generation that from the perspective of packaged coffee market (including solid and liquid ready to drink coffee), the sales of black coffee in online channels basically account for about 65-70%, while more than 80% of offline channels are still mixed coffee. Overall, the market share of black coffee in terms of sales is about 30%-40%.
“But in the past year, we have seen a similar trend in both online and offline channels, that is, the growth rate of black coffee is faster.” She said.
Wang Lei, vice president of Omni channel food retail and e-commerce of Nestle Greater China, made a speech at the communication meeting
However, the higher sales of black coffee cannot be directly equivalent to the more black coffee cups consumers drink.
“According to our observation, 70% of black coffee buyers will eventually make other coffee drinks, such as latte with milk. Especially during the period of isolation at home or work at home, people may have more time to make fancy coffee.” Hewanlong tells xiaoshidai.
For Nestle, blended coffee plays an important role in the “Recruitment” and channel sinking of the whole category, because as the “first cup of coffee”, this kind of coffee is more acceptable to consumers, while black coffee is more targeted at coffee lovers and high-level players. “In recent years, the growth momentum of the black cup has been stronger, so it is an area we focus on, and there are many new products.” Wang Lei said.
In fact, many categories covered by the new product of Nestle coffee are currently selling black coffee products. What are the innovations of the newly launched black coffee products?
The coffee giant said that in recent years, through a large number of market observations and interaction with consumers, Nestle coffee has captured that consumers’ demand for products and tastes has been increasingly segmented. Therefore, the snack generation has noticed that the new products launched this time are more about segmenting needs – although they are all black coffee, they can be “black” in a variety of ways.
Take instant black coffee as an example.
According to the presentation materials of Nestle, according to the different preferences of coffee flavor, from fruit acid flavor to classic taste, from coffee mellowness to coffee intensity, Nestle listed the detailed needs of domestic black coffee lovers in four quadrants, and covered them with a more comprehensive matrix of instant black coffee products.
Image source: Nestle coffee
Snack generation noticed that the “sense caf É” fine freeze-dried coffee powder “color coffee” located in the upper left quadrant is a new black coffee product released by Nestle coffee on the day of pre-sale in 618 this year. “Gan caf É” is a super high-end brand launched by Nestle coffee in the Chinese market in 2020.
Interestingly, while adding the “soft and smooth flavor of sour coffee”, the color coffee also creates a synesthesia experience of taste and vision. The three flavors correspond to three color systems, and has launched a 618 co branded gift box with the domestic beauty brand heir Herr.
Gan caf É fine freeze-dried coffee powder “color coffee”
While innovating flavor and experience, the black coffee products launched by Nestle coffee this time also tried younger packaging ideas.
The snack generation noticed that the “black coffee 100 days” instant coffee that was launched during the 618 period was very good. In the form of cartoons on the inner bag packaging, it gave workers 100 reasons to drink coffee: “a cup of coffee for a pile of work”, “I wake you up at will”, “it’s rare to be awake in the world, at least in the morning”
Nestle coffee “black coffee for 100 days”
In addition, other categories of Nestle coffee have also joined the new members of black coffee, including the launch of the new “signboard American style” for instant coffee, the launch of the new ear hanging series by Gan CAF, the selection of high-quality coffee beans from Yunnan and Colombia respectively, and the launch of the new black coffee with bags of ground coffee and the upgraded coffee liquid of “xiaocaqu” by Nestle’s gold medal series.
“Concentrate is a new category of black coffee that we have developed in the past two years, and it is very popular with young consumers.” Zhaoxuemei said.
“60/40+” innovation principle
The return to black coffee innovation can be said to be a “Renaissance” of Nestle to some extent. The first cup of instant coffee in the world, invented by Nestle in 1938, is black coffee, and the “Nestle coffee” brand has started. Now, after 84 years of selling all kinds of coffee and establishing a huge product matrix, Nestle coffee has “returned to the original point” and focused on exploring new growth opportunities for black coffee.
Nestle said that the development of new black coffee products on the market this time follows the principle of “60/40+”, that is, in the blind taste test, more than 60% of consumers must choose it before they have the chance to launch. “+” means to increase the added value of nutrition and health for consumers. Its purpose is to make Nestle’s products not only enjoy the taste, but also bring clear health benefits to consumers.
Gan caf É Yunnan series boutique ear hanging coffee
On the one hand, when it comes to taste research and development, the company mentioned that nestle coffee has a professional flavor tasting team, “led by coffee experts with more than 30 years of industry experience, all members have more than 8 years of experience in the coffee industry, and many members have Q grader certificates. The team has an average of more than 2000 cups of coffee per person per year.”
On the other hand, Nestle believes that in 2022, when “liuzhenhong boys and girls” sweep the whole network, the functional features of black coffee are becoming familiar to more and more young consumers, and this kind of coffee product is also expected to attract more fitness people.
The company pointed out that the European Food Safety Authority (hereinafter referred to as EFSA) has evaluated a series of research reports on coffee and clearly proposed that a certain dose of caffeine (75-210mg/ time) has obvious effects in improving human alertness, attention and endurance.
Based on this, Nestle also put forward suggestions on “drinking black coffee more effectively” according to the needs of different groups. It said that according to the research of EFSA, caffeine reaches the peak concentration of caffeine in blood about 30-120 minutes after intake, and the half-life of caffeine is generally about 4 hours affected by individual differences.
Nestle coffee gold medal “xiaocaqu” upgraded coffee liquid
“Therefore, for people who need to be refreshed in the morning and evening, coffee can be refreshing 30 minutes to 4 hours after drinking; for people who pursue a healthy lifestyle, drinking coffee 60 minutes before fitness (high-dose caffeine 3-4mg/kg; for adults weighing 70 kg, it is about 210mg-280mg caffeine) is conducive to improving endurance and fitness; drinking a cup of black coffee before nap will make you feel refreshed when you wake up 20 minutes later.” Nestle said.
This wave of concentrated innovation is also the latest move by Nestle China to stabilize its position as the “coffee leader”.
According to the data, at present, the scale of China’s coffee market has reached 87billion, with an average growth rate of nearly 20% in the past five years. This fast-growing track is also attracting new entrants.
When it comes to competition and its own advantages, Nestle said that providing a distinctive product matrix according to consumers’ different preferences for flavor, function and experience has been the “fundamental driving force” for Nestle coffee to be evergreen in the coffee industry for decades.
Image source: Nestle coffee; Data source: Kaidu, Nielsen, etc
“Coffee culture can not be promoted by just one company. It is a good thing for more participants to enter this track. For Nestle coffee, we have been deeply involved in the Chinese market for 30 years, and there is a huge precipitation from technology to coffee culture. We will not only do some shallow innovation. For example, behind the new black coffee product, we have done a lot of flavor research, divided the flavor map, and passed through us Supply chain to implement many innovative ideas. This may be the difference between us and some new consumer brands. ” Wang Lei said.
Sense caf É Columbia series boutique ear hanging coffee
At present, in the packaged coffee product market (including instant coffee and instant coffee), Nestle China’s market share is still far ahead. According to the data obtained by snack generation from Euromonitor Euromonitor information, in 2021, in terms of total retail sales, Nestle’s share in the instant coffee market reached more than 70%, far exceeding the second place’s 2.8%; The ready to drink coffee market is also close to 47%, while the second place is 5.7%.
In order to seize the growth opportunity, Nestle coffee has been “stepping on the accelerator” in product innovation in recent years. For example, last year, more than 100 innovative and improved coffee products were launched on the double 11. Last year, black coffee was also identified as one of the priorities of innovation. Last year, he Wenlong pointed out to the snack generation that with consumers paying more attention to health, the biggest trend at present is black coffee.
Therefore, in 2021, Nestle coffee has successively launched a series of new black coffee products, including imported absolute dark coffee, bagged gold medal xiaocaqu coffee liquid convenient for mixing drinks, soul burning instant coffee with high caffeine content, and Nestle caf É coffee.
Image source: Nestle coffee; Data source: Kaidu, etc
“Compared with the United Kingdom, Japan, the United States and other countries, China’s per capita coffee consumption still has great growth potential. Our future research and development direction will continue to break down the pursuit of segmented people and do product innovation and upgrading. For Nestle coffee, we hope that our product line can provide consumers in various cities and segments of China with products that meet their needs, and through extensive channel coverage, make every A consumer can find the right cup of coffee for him. ” Zhaoxuemei said.
Author: hedanlin; Source: xiaoshidai (id:foodinc), reprint has been authorized. Reprint authorization and media business cooperation: Amy (wechat: 13701559246);
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