Nestlé to invest $196 million in Brazil to increase production line of Nescafe

Nestlé to invest $196 million in Brazil to increase production line of Nescafe

May 13 - 2024

Coffee Geography Magazine

Nestlé plans to expand the production line for Nescafé in Brazil with new investment worth $196 million. Nestlé expects sales of the Nescafé brand in the Brazilian retail trade to grow by up to 15% per year over the next four years, said Valeria Pardal, head of Nestlé’s coffee division in Brazil. This means that Nescafé in Brazil will grow significantly faster than the overall market, for which growth of 5% to 6% is forecast.

Part of the investment will be channelled into expanding out-of-home consumption, particularly through the business-to-business segment: Nestlé expects to double the number of its out-of-home coffee machines in Brazil to 44,000 within four years. Younger people under the age of 24 are the key segment of this market, says Pardal. This is because consumption growth among them is ten times higher than among older consumers.

The world’s largest food company recently announced the launch of a new liquid coffee concentrate under the Nescafé brand, which is also primarily aimed at the younger generations. According to Nestlé, younger people are increasingly drinking cold coffee to go, which is why the company has promised innovations in this area.

The company aims to consolidate the brand as a vehicle for higher value-added products that are rapidly growing in the country, according to the firm. The Nescafe brand, which was first created in Brazil to sell instant coffee, today has a broader range of products. It seeks to capture consumers who are increasingly younger and want new "experiences" with the beverage, and who pay more than they normally would for a traditional cup, the executives said. Consumption growth among people under 24 has been 10 times higher than among the rest of the consumer groups, according to Nestle.