Sector News

Nestlé to invest BRL 1bn to strengthen Brazilian coffee sector

May 17, 2024
Consumer Packaged Goods

Nestlé has announced plans to invest BRL 1 billion (approx. $193.97 million) in Brazil by 2026 to strengthen its B2B and B2C presence in the country.

The coffee giant said the funding will be used to install new tech, such as roasting equipment, increasing production line flexibility to make new products and flavours – including higher value-added products, – and technology updates to improve sustainability.

Nestlé will focus the investments on its Nescafé factory located in Araras, São Paulo, and the expansion of its Nestlé Professional machine park, aiming for a 50% increase in capacity in the next two years.

According to Reuters, the funding will also be used to expand Nestlé’s production capacity and out-of-home sales of its Nescafé lines, targeting younger consumers. By boosting out-of-home consumption, through its B2B segment, the company expects to double its number of out-of-home coffee machines in four years to 44,000.

For Nestlé, Brazil holds a strong position due to the growth opportunities in coffee consumption – according to the Brazilian Coffee Industry Association, coffee consumption within the country is six times higher than the global average.

“We believe in the segment, and in addition to product launches, we are enhancing messages focused on Gen-Z, a demographic that shows greater interest in discovering new flavours and ways to enjoy coffee,” said Valéria Pardal, executive director of Nestlé Coffees.

In Brazil, coffee consumption has evolved over the years, especially with the premiumisation of coffee and the trend toward iced coffee, with significant growth among young people between 16 and 24 years old. Last week, Nestlé debuted its new line of espresso concentrates specially crafted for use in iced coffees.

Pardal continued: “We are in a moment of expanding premium coffee consumption, with higher added value, which is sophisticating coffee consumption in Brazil. We work with the Nescafé brand for mass consumption so that this premiumisation is democratic. Brazilians consume between four and six cups of coffee per day, and Nestlé’s mission is for that cup to be of higher quality.”

By Phoebe Fraser

Source: foodbev.com

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