Over the past two years, it’s launched innovations such as Nescafé Espresso Concentrate and Nescafé Ice Roast instant coffee, which are designed to dissolve swiftly and effectively in cold drinks.
Consumers are increasingly seeing themselves as home baristas, looking for indulgent coffee treats that share well on social media; or looking for trendy RTD options out of home.
Nescafé, Nespresso and Starbucks
Coffee is already a high point for Nestlé: thanks to global heavyweight trio of Nescafé, Nespresso and Starbucks.
In the company’s FY2024 results, released this morning, coffee was the star performer globally. With mid single-digit growth, coffee was the largest contributor to growth for the company, thanks to these three power brands and RTD variants.
The latter is a particularly exciting category.
“In ready-to-drink coffee, annual sales today are around CHF 1 billion with double-digit growth,” said Laurent Freixe, Chief Executive Officer, Nestlé S.A, in the company’s FY2024 earnings call.
“There is a lot of runway ahead as we expand beyond our current strongholds.”
Focus on accelerating growth
Reporting its FY2024 results this morning, Nestlé saw total reported sales decline 1.8%. Organic growth was 2.2%.
Results were dragged down by ‘disappointing’ results in North America: with organic sales in this market down 0.5%. But beverages still bucked the trend in this market: with coffee and coffee creamers such as Nescafé and Starbucks seeing continued momentum.
FY2024 results were impacted by ‘a slowdown in category growth and our own below-market development’, said Nestle.
“We have a clear focus on accelerating category growth and improving our market share performance in 2025 and over the medium term," reports the company.
"An important part of how we deliver this is focusing our resource allocation behind our strongest growth drivers: scaling existing winning platforms and brands; accelerating the rollout of our innovation ‘big bets’; and building new growth engines that capture emerging consumer trends."
The company's guidance for 2025 remains unchanged. It expects accelerated delivery of cost efficiencies to offset recent increases in key commodity prices, and organic sales growth is expected to improve compared to 2024.
Satisfying the growing demand for cold coffee
Cold coffee is increasingly the coffee drink of choice, especially among Gen Z and Millennials, observes Nestle.
The company believes it can capitalize on this fast-growing opportunity with a ‘broad and complementary portfolio of innovative products’ under its leading brands coffee brands.
This enables consumers to create café-style cold coffee at home.
For example, Nestle has been rolling out its new Nescafé Espresso Concentrate - the ‘ultimate cold coffee hack for creating barista-style coffees at home’ - using the premium liquid concentrate.
The product was rolled out in Australia, New Zealand and China in 2024, with launches planned in North America, the UK, Japan and Thailand in 2025.
Other cold launches include Nescafé Ice Roast instant coffee (which dissolves quickly in any cold liquid). Mixing cold with a trendy flavor, Nespresso Sunny Almond Vanilla Over Ice helped contribute to strong Vertuo cold growth.
It’s essentially an extension of the same trend already seen in hot coffee: a desire to create premium, luxury, barista-quality brews in the home.
However, the coffee category is not without its challenges. Nestlé must also deal with a high inflationary environment for commodities such as coffee and cocoa.
“We are taking an agile approach to passing on input cost increases, selectively investing in price as we focus on restoring competitiveness,” says the company.