Nestle to boost Brazil investments and target young consumers with ‘more sophisticated’ coffees

Nestle plans to invest 1-billion reais ($196.5m) in Brazil by 2026 to expand production capacity and out-of-home sales of its Nescafe lines, targeting younger consumers, executives say.

The company aims to consolidate the brand as a vehicle for higher value-added products that are growing in the country.

The Nescafe brand, which was first created in Brazil to sell instant coffee, today has a broader range of products. It seeks to capture consumers who are younger and want “new “experiences with the beverage, and who pay more than they normally would for a traditional cup. “We are at a time of expanding consumption of premium coffee, and that is making coffee consumption more sophisticated in Brazil,” Valeria Pardal, head of Cafe Nestle, said.

Part of the investments will be directed into expanding outof-home consumption, with the company expecting to double its number of out-of-home coffee machines in four years to 44,000. Nescafe expects its sales in Brazil’s retail market to grow by up to 15% a year , outpacing the 5%-6% growth it forecasts for that market.

“Brazilians have four to six cups of coffee a day, which is a lot, and our mission is to make sure those cups are of higher quality,” Pardal said.

Consumption growth among people under 24 has been 10 times higher than among the rest of the consumer groups, according to Nestle.

“This is something new for the market. They drink iced coffee, coffee with cream, coffee with caramel,” Pardal said. “We used to say coffee was a stimulant, today we say that coffee is a cup of pleasure.”