With fierce competition in the coffee market, how can Nestl é maintain its position as the leader in the industry?
Nestl é has failed to meet its annual sales growth expectations for nearly three years, and the upcoming first-half results are the first financial data since Nestl é implemented a cost-cutting program. Nestl é hopes to ease pressure from investors to improve profitability by cutting costs.
Analysts said Nestl é's comparable sales were expected to rise 3.8 per cent year-on-year in the first half as falling dairy prices and deflation in Europe affected second-quarter sales. Both Nescafe and Nespresso grew in the first quarter and are expected to continue their growth momentum in the second quarter.
But Nestl é executives say their current status as the industry leader does not give them peace of mind because a new generation of consumers want healthier food and unique experiences, while competitors can increase brand influence through economies of scale.
In addition to advertisements endorsed by will.i.am, Nestl é has launched high-quality local products to cater to increasingly demanding consumers and has opened stores in cities such as Tokyo and Seoul.
The competition is becoming increasingly fierce.
Nestl é faces all-round competition, but the rise of JAB should exert the greatest pressure on Nestl é.
JAB is controlled by the German billionaire Reimann family and its brands include Jacobs,Douwe Egberts,Caribou and Keurig. The rapidly expanding JAB has also been compared to 3G Capital, a private equity firm behind InBev Budweiser's acquisition of SABMiller, another beer giant. (for details, see the report in Huazhi: the beer industry reached a stunning merger of hundreds of billions of dollars: AB InBev acquired SABMiller, with a total of 224 brands.)
The chairman of Nestl é has accused 3G Capital of "disrupting" the food industry. 3G Capital merged to form Kraft Heinz, which owns US coffee brands such as Maxwell House and Gevalia.
Nestl é CEO Paul Bulcke said he is not afraid of competition, for consumers, competition between businesses will help consumers get a more thoughtful consumer experience.
Nestl é earned more than $15 billion in coffee sales last year, thanks in large part to the global popularity of Nescafe, which is also hailed as the most valuable beverage brand after Coca-Cola and Pepsi.
Patrice Bula, executive vice president of Nestle Coffee, told investors in May: "these achievements are great, but they are a thing of the past. Large scale does not mean rapid development, nor does it mean that it can attract more consumers in the future. "
Glory is a thing of the past.
After the acquisition of American capsule coffee company Keurig Green Mountain (see Huazhi: German investment holding group JAB acquired K-cup single-cup coffee maker Keurig for $13.9 billion), JAB already has the largest share of the capsule coffee market, which is the fastest-growing and most profitable part of the company.
The closed retail system is Nespresso's guarantee of industry-leading profit margins, and consumers can only buy Nespresso coffee capsules in coffee shops or online. But there are currently 210 competitors producing capsule coffee compatible with the Nespresso capsule coffee machine, and Starbucks will also launch its own-brand coffee maker, Nespresso's profit margin is facing challenges.
"Nespresso will face a serious challenge: how to maintain their extremely high profit margins while vigorously carrying out marketing activities and expanding stores," said Jean-Philippe Bertschy, an analyst at Vontobel.
Patrice Bula says Nespresso plans to open 50 more boutiques a year in more than 20 new countries by 2020, most of which will be in Latin America. Nespresso also recently launched a digital coffee capsule vending machine.
Nescafe Dolce Gusto has built a new factory in Brazil to boost growth, the first time Nescafe Dolce Gusto has set up a factory outside Europe, while Nestl é has introduced special milk coffee drinks and premium coffee made from rare beans at higher prices. Nestl é is also supplying drinks to new international markets, such as Coffee Viet made from fish sauce popular in Vietnam and Nescafe Arabiana made from cardamom in the Middle East.

- Prev
Challenge the industry giant whether this "intelligent coffee car" can open up the Chinese coffee market.
① has scale and market, but the chain coffee giant is dominant, and there are not many other large-scale brands. According to industry data, China's coffee consumption market in 2015, however, compared with the mature coffee market in Europe, the United States and even Taiwan, the mainland coffee market is mainly controlled by chain coffee giants, and there is no competitive format in which a hundred flowers blossom. The entry threshold of ② industry is high, and coffee culture
- Next
Crowdfunding coffee is toxic: is it crowdfunding or cafes that are at fault after another?
How poisonous is the crowdfunding cafe? On August 6, 2011, 3W Cafe, which was served as CEO by Internet analyst Xu, was officially established. Unlike tens of thousands of cafes in China at that time, 3W Cafe was called the first crowdfunding cafe in China. According to the data, the shareholders of 3W Coffee include a number of domestic successful entrepreneurs, investors, entrepreneurs and media opinion leaders.
Related
- It's a huge uproar! Well-known brands use "prefabricated concentrate" for cold extraction?!
- The store was exposed to mice running around! Mixue Ice City urgently apologizes!
- The more you look at it, the weirder it becomes?! Lucky linkage cup print three-eyed Tom Cat!
- Self-delivery modification was rejected! Customers come to the door and throw coffee angrily?!
- What degree of grind should I use to make coffee by hand? How fine should the coffee powder be ground with cold ice drops? What is the No. 20 screen? How fine are the grains of fine sugar? What is the appropriate grind for the espresso?
- Why is coffee bean watches always oily? Are the oil out of the coffee beans stale? Are oily coffee beans of higher quality? What is the difference between deep and light coffee?
- How long is the taste period for coffee? How long is the best time to finish your coffee? How long can coffee stay in a thermos cup? What is the best degree of hand-brewed coffee?
- Pour out all the raw materials! Many Lucky products are off the market!
- "Haidilao in the milk tea industry" Kawangka quietly increases its prices again! Netizen: No more drinking!
- Ask for 20,000 yuan! Coffee shop managers trick employees into fake marriages?!