The Starbucks takeaway you ordered is actually Nestle!

In today's coffee market in China, although instant coffee is shrinking, it still dominates 70%.

Although there are many criticisms from the outside world, such as unpleasant drinking like medicine.

But in fact, Nestle is more like an invisible coffee giant, which has been tasted by you before you know it.

Moreover, you even brush the presence and likes in the circle of friends, but you just don’t know that you are drinking Nestle.

Why is this so? Let me tell the truth:

With the exception of Starbucks coffee in cafes, the operator and supplier of all home coffee, including ready-to-drink, bottled, bottled, and even Starbucks quick-drink coffee, is Nestlé.

But instant coffee is still Nestlé's ace in the field.

"I drink both capsule coffee, gold medal instant coffee and pure instant coffee. There are 4 or 5 types of coffee that I will drink interchangeably." When a high-level Nestle China executive said the above words to the media, he was actually inadvertent. Time has exposed his subconscious positioning of Nestlé.

Still a giant, Nestle, which has survived into an invisible giant, is failing in the field of instant coffee.

According to the data, although Nestle’s instant coffee maintains a 40% market share, it is constantly faced with the proposition that “Nescafe coffee no longer attracts young people” and “Nescafe coffee is no match for niche coffee brands”.

On the Internet, some people even used the unpleasantness of Nescafé coffee to ridicule the unsatisfactory life, and compared the taste of Nescafé coffee with medicine.

A few days ago, Nestle announced its first quarter financial report for 2022, with total sales increasing by 5.4%, revenue of CHF 22.2 billion, and sales decreasing by 0.8% due to exchange rate issues.

From January 2022, Nestlé will separate the Greater China market, and in the first quarter, it also achieved revenue of 1.316 billion Swiss francs, a year-on-year increase of 7.6%, accounting for 6% of total revenue.

The financial report shows that Nestle's instant coffee has experienced a slowdown in growth since 2009. From 2015 to 2021, Nestlé's revenue was 4.2%, 3.2%, 0.4%, 2.1%, 1.23%, -8.9% and 3.3%, respectively.

In this regard, Yuan Yiming of Sina Finance and Shule had some exchanges, and Pindao thought:

Instant coffee, ready-to-drink coffee, freshly ground coffee beans, coffee capsules, coffee machines, capsule coffee machine，covering high, medium and low-end brands. But in the eyes of the Chinese, Nescafé is almost synonymous with instant coffee, and it tends to be in the low-end market.

In real life, most people may not know how a coffee capsule is made. It is made by a coffee capsule filling machine. For the specific machine operation process, please refer to a video of a nespresso coffee capsule filling machine. Of course, coffee can not only be made into capsules, but also into small bags and strips. The machine used here is vertical powder packing machine. For the specific operation process, please refer to the video of vertical pouch packing machine. Vertical packing machine for food can be filled with Holds powders, liquids, pastes, granules, etc. Vertical liquid packing machine, vertical granule packing machine, are not listed here.

Nescafé's current situation is "the ship is difficult to turn around", much like Head & Shoulders or Procter & Gamble back then.

In the 1980s and 1990s, Chinese consumers did not have the opportunity to experience consumer goods such as coffee. Coffee is a very "high" product that requires time and effort, and requires special equipment to enjoy, but Nestlé can provide a A very convenient choice.

Similarly, Head & Shoulders Procter & Gamble launched a combination 2-in-1 shampoo, which only meets consumers' anti-dandruff needs, and is a product that packs a series of processes.

However, with the development of the economy, the needs of the Chinese people have changed, and they are no longer the same as they were decades ago, and they will not choose general-purpose products.

Today, the needs of young consumers are beginning to differentiate. Instant coffee itself is designed to provide convenience, and its quality itself is not as good as original freshly ground coffee.

No matter how instant coffee is developed, it is difficult to compete with ordinary freshly ground coffee beans.

And at present, Starbucks, Ruixing Coffee, and various milk tea shops are all on the rise, and the entire instant coffee field is limited.

But Nestlé cannot and does not need to innovate.

What is the reason?

I thought that, after all, the Nestlé brand is too big. If you continue to launch new products to try and make mistakes, it may bring more negative effects, just like when Coca-Cola changed its formula.

At present, there are only two flavors of Nestle's instant coffee, black coffee with milk and pure black coffee, but in fact Chinese people are not used to and like this taste.

In contrast, for other niche brands that have just emerged, such as three-and-a-half, it can be understood that they are coming to the gym, and all kinds of tricks can be used.

For another example, Ruixing can cooperate with Coconut to launch a joint model, but Nestle will not try it easily.

The most important thing is to play with intimacy in marketing. For example, during June 18 this year, Nestlé launched the “Black Coffee 100 Days” daily black coffee.

This wave can basically be said to be a marketing strategy for the Z generation: a small workplace theater in the inner bag packaging, cute comics + innovative packaging form, so that every black coffee experience is full of surprises and a sense of ritual.

In a sense, Nestlé has entered a period of sinking the market, passively!

The origin is only the inherent market in the past, which has been eroded by niche brands on the new consumption track.

In first-tier cities such as Shanghai, Nestlé has been hit a lot, and instant coffee has become less stylish when there are many cafes.

At the current stage, Nestle has lost its dominant position in the instant coffee field. When there was no cafe before, when coffee was mentioned, Nestle would come to mind.

But now there are more and more coffee options on the market, more and more flavors, and fewer and fewer cities can connect coffee and Nestle.

The market trends that need attention are: young people are the main force of coffee consumption, because the post-80s generation in second- and third-tier cities hardly develop the habit of drinking coffee, while today's urban white-collar workers have developed a rigid need for coffee, but they are more focused on quality, So don't choose instant coffee.

This has created an embarrassment of Nestlé's coffee status.

In particular, its high-end capsule coffee is too expensive for young people, while other products are more expensive than similar products on the market.

Wanting to talk to young people, but unable to diversify, has become a dilemma for Nestlé in first- and second-tier cities.

But in some small towns with limited consumption choices, Nestlé still has a certain market.

However, Nestlé's strategic choice is to lie flat in terms of look and feel.

For Nestlé, the Chinese market is as long as there is, because the coffee market in China is not fully opened, only the first-tier cities have cultivated the habit of drinking coffee, and other areas are mainly based on tea and beverages.

Nestle does not need to spend too much energy to incubate the Chinese market, so it may wait for China to develop a coffee consumption habit and the market hatches before "killing back to the battlefield" and using various methods such as low prices to match opponents.

There are small benefits and big difficulties, but for Nestlé, the biggest problem is:

How long will it take for China's coffee consumption habits to be hatched? Although we can afford to wait, it is inevitable to be anxious and unhappy to see the market being impacted in various ways.

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