Nestle Invests $196.5M in Brazil Coffee Market to Meet Demand for Higher Value Products and Cater to Younger Consumers

In response to the increasing demand for higher value-added coffee products and the trend of younger consumers seeking new experiences with coffee, Nestle has announced a plan to invest 1 billion reais ($196.5 million) in Brazil by 2026. The investment will be primarily used to expand production capacity and out-of-home sales for its Nescafe line. Nestle aims to consolidate the Nescafe brand as a means to promote higher value-added products, which are growing rapidly in the country. According to Nestle, Nescafe sales in Brazil’s retail market are projected to increase by up to 15% annually over the next four years, surpassing the 5% to 6% growth rate of the overall retail market in Brazil. The investment will focus on expanding out-of-home consumption via the business-to-business segment, with Nestle aiming to double the number of out-of-home coffee machines to 44,000 in the next four years. This strategy aligns with the increasing trend of Brazilians consuming four to six cups of coffee daily, providing Nestle with a significant opportunity to improve the overall quality of these cups, particularly among younger generations. According to Nestle, coffee consumption among individuals under the age of 24 has grown tenfold compared to other consumer segments. Nestle’s Head of Nestle brand Cafe Nestle, Valeria Pardal, noted, “We used to say that coffee was a stimulant, today we say that coffee is a cup of pleasure.” The news comes as robusta coffee futures continue to climb due to drought in Vietnam, causing concern for consumers facing rising food prices. However, Nestle’s investments in Brazil reflect its commitment to meeting the growing demand for coffee products in the region. The investments will create opportunities for Nestle to expand its product offerings to include iced coffee, coffee with cream, and coffee with caramel, catering to changing preferences among younger consumers. Overall, Nestle’s investment in Brazil represents a strategic move aimed at capitalizing on the growing demand for higher value-added coffee products and capturing a larger share of the market among younger consumers.