Nestlé Coffee's Future Development Strategy: Nestlé Coffee to Double Its "Sustainable Development" Expenditure

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According to Bloomberg reports, Nestlé is increasing its sustainability spending for its "Nescafé" brand.

Nestlé plans to invest over 700 million Swiss francs ($787 million) over the next decade. These investments will be used for responsibly sourcing all Nestlé coffee, tracing supply to farmer groups by 2025, and achieving 100% responsible sourcing in the coffee category.

Additionally, Nestlé is transitioning to 100% recyclable packaging. The company stated that it will achieve net-zero carbon emissions by 2050.

According to reports, this investment is more than double the sustainability spending of the past 10 years.

On December 3, 2020, Nestlé planned to invest 3.2 billion Swiss francs (approximately $358 million) over the next 5 years to reduce its climate impact. About 1.2 billion Swiss francs will be used to develop regenerative agriculture in its supply chain and achieve 100% renewable electricity use within the next five years. The company also hopes to plant 20 million trees annually in its raw material source regions over the next 10 years.

Previously, Nestlé also revealed plans to further expand its three Nespresso capsule production sites in Switzerland. On July 8, 2020, Nestlé Nespresso invested 160 million Swiss francs (approximately 1.192 billion RMB) to build a factory at its production center in Romont, Switzerland. The first new production line is expected to be fully operational by June 2022.

In August of the same year, Nespresso also collaborated with famous illustrator Pencil Bryan to release five limited edition coffees.

For its short-term goals, Nestlé hopes to achieve carbon neutrality by the end of 2022. Nestlé China stated on its official Weibo account: the brand will make every cup of coffee, including both home and commercial coffee, completely carbon neutral.

Founded in 1866, Nestlé is the world's largest food manufacturer. In terms of coffee, Nestlé's main coffee markets are in the mid-to-low end instant and ready-to-drink products. It first launched instant coffee in 1989 and became popular with the slogan "It tastes great." Currently, it owns three major coffee brands: Nescafé, Nespresso, and Starbucks.

The history of Nescafé can be traced back to the 1930s. Initially, Nescafé was created to help solve the problem of excess coffee inventory. After decades of development, it has now become a world-renowned coffee producer. In 1986, Nestlé launched four NESPRESSO coffee capsules - Nes (abbreviation for Nestlé) + presso (espresso), which quickly became popular worldwide. Nespresso is a subsidiary brand of Swiss Nestlé company, with its headquarters located in Lausanne, Switzerland. Nespresso officially entered the Chinese market in 2007. Since then, Nespresso's business core has focused on promoting coffee culture and providing excellent coffee experiences. On October 10, 2019, Nestlé announced on its official website that its subsidiary brand Nespresso officially changed its Chinese name to "浓遇咖啡" (Nóng Yù Kāfēi). Nespresso is committed to innovation and research in the coffee field.

Nestlé has 11 production centers and 4 R&D centers in Switzerland. In the past 10 years, Nestlé has invested an average of 300 million Swiss francs annually in Swiss infrastructure and operations. Additionally, over the years, Nescafé has launched multiple coffee products, including Starbucks instant coffee, Nespresso Yunnan Limited Edition, Nestlé ready-to-drink tea, light meal brand nesQino, and "感CAFE" drip coffee bags. At the end of 2019, Nescafé also launched a "Pour-Over Master" drip coffee in China.

In recent years, the Nescafé coffee market has achieved considerable success and has become one of its fastest-growing business segments. In this context, Nestlé has accelerated its layout in the coffee market. This major investment in the coffee market may be due to the rapid growth trend in the coffee category.

Image source: Internet

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