Nestlé, the renowned Swiss packaged food major, is placing a significant bet on India to fuel the growth of its coffee business. This strategic move comes at a time when India’s coffee culture is rapidly evolving, driven by the preferences of young consumers and a burgeoning interest in specialty coffee. Despite tea-drinkers still reigning supreme in the market, Nestlé sees India as one of the fastest-growing coffee markets and aims to capture the attention of more Indian consumers, persuading them to embrace the joys of coffee.
Philipp Navratil, Head of Coffee Strategic Business Unit at Nestlé said, “India is a very important market for us because of its sheer size and population offering huge headroom for growth with a low per capita consumption of coffee. We are also seeing a growing coffee culture driven by young consumers with new coffee shops coming up in the country.”
He highlighted India’s position as a swiftly emerging market for Nestlé’s global coffee business, underscoring the fact that Nescafé has already achieved a household penetration of 46 million households in the country.
“India is a sizable market already and household penetration is accelerating. We believe Nescafé is perfectly positioned to introduce coffee to new consumers as its offers great quality at accessible prices in terms of price per cup.,” Navratil said.
“Our key focus is to grow the household penetration of our coffee portfolio further in India. We believe it’s not a matter of if but when and it will probably happen faster in the southern India region as they have a well-entrenched coffee-drinking habit. We are also sharply focusing on driving efficiencies in our supply chain to maintain the “magic price points” such as INR 2 or INR 10 as they are critical to make our products accessible to a broad population,” he added.
Asked about plans for future launches, he said, “Our strategy is to continue to grow our existing core portfolio. We also want to tap into the premiumisation opportunity in India as coffee consumption is getting more sophisticated, allowing us to bring innovations to India. We may look at launching products such as coffee concentrates and single origin coffees.”
In 2012, Nestlé introduced the Nescafé Plan, a sustainability initiative, in India. Over the past decade, Nestlé India has collaborated with 3,500 coffee farmers in the country to source coffee. Navratil emphasized that Nestlé relies on Indian farmers as a key source for their coffee production, catering not only to the domestic market but also to global production needs.
“We also see a huge opportunity to leverage India as a talent factory for our global coffee business,” he added.
