The escalating prices prevent more active growth of the industry and lead to the change in preferences of many local consumers with more of them beginning looking for cheaper products. Euromonitor International analysts confirm this, noting that current negative economic factors may lead to stagnation of both tea and coffee sectors of Germany in the middle term.

Lina Sidorenke, a senior analyst with Euromonitor International, said, “[According to our data,] inflation, a prevailing concern in Germany, is exerting a considerable influence over consumer behaviour. The prices of daily essentials, including coffee, have witnessed upward spirals, prompting consumers to be more judicious in their purchasing decisions.”

She said that the impact of inflation is visible in coffee, where consumers are increasingly opting for cheaper brands and exploring discounters to address rising costs. “Rising prices have encouraged many brands and retailers to offer promotions and discounts to drive up volumes. Still, despite the increasing prices of food and beverages, German consumers remain loyal coffee drinkers, as coffee is part of their everyday routines, thereby supporting positive retail demand at present.” Euromonitor reports that sustainability in coffee remains a dominant theme both for consumers and brands. For example, single serve coffee capsules have come under scrutiny for their contribution to environmental waste. According to the global market research firm, several players have introduced compostable packaging solutions to address these concerns. Effectively communicating these sustainability features has become paramount, as consumers increasingly seek eco-friendly coffee products.

Sidorenke explained that “the demand for fresh coffee beans is on the rise in Germany and continues to pose a threat to coffee pods and/or capsule machines. There is increasing availability of fully automated coffee machines that can actually compete with single-serve solutions, both in terms of price and taste.” She said in the long term, an increasing number of consumers are expected to switch to fresh coffee beans, especially as they are perceived as offering a richer coffee experience.

Mintel, shares the same view, noting that due to cost issues more and more German customers prefer to consume coffee at home instead of visiting cafés. A recent report from the global market research firm states that given the current economic backdrop, the reintroduction of 19 percent VAT and the overall strained financial situation in Germany, many consumers are trying to bring the café feeling home.

According to Mintel, most local customers are turning to inexpensive products and blends that are based on barista-made coffee. Instant coffee and coffee blends are the perfect solution for coffee lovers who are careful with their money. Mintel analysts believe that in the short term, this ongoing financial pressure on households holds further potential for more cost-effective formats. Companies can take advantage of changing consumer behaviour. Younger target groups in particular respond to barista-made coffee drinks at home. Both analysts and local coffee companies said this may all be good news for coffee brands, but the situation is highly problematic for cafés.

Cafés had a tough time during the pandemic due to constant closures. And now they are once again feeling the pressure of rising living costs, which are being exacerbated by the reintroduction of 19 percent VAT in the hospitality industry of Germany.

At the same time, they are threatened by outlets that do not specialise in coffee. For example, percent of consumers actually buy their coffee from a bakery or retailer, not in a café. Due to ongoing income pressures, more local consumers have become disloyal to their coffee brands, which created serious problems even for some major local players. Furthermore, the market is highly competitive and highly fragmented.

Premium brands in particular have been hit hard. And even the market leader Nescafé, which continues to lead the instant coffee segment, has been faced with downward trend. Some leading representatives of the German coffee sector shared that the ever tightening regulations along with climate change may lead to the decline of production of some coffee varieties.

Thomas Eckel, coffee sommelier and owner of the Murnau Coffee Roastery, one of the largest roasteries in Bavaria, in an interview with German Meininger business paper, said the EU Deforestation Regulation (EUDR), which aims to keep products linked to deforestation off the European market will  oblige companies to prove that their supply chains do not contribute to deforestation and that environmental, labour and human rights are respected. That may create some problems for the industry, as all of the companies will require support from farmers.

Eckel has also expressed some serious concerns about the effects of climate change on the entire industry and German coffee producers. “Coffee is one of the agricultural products most affected by climate change. We should take this very seriously. In general, we will definitely not drink coffee the way we do today in 2050. Many cell-based coffee products are also coming onto the market. These will help to close the gap in coffee supply.”

The current market challenges are putting additional pressure on leading German coffee manufacturers and could be associated with serious losses for them already in the short-term. In contrast to previous years, they will be unable to increase prices for their products to compensate their losses due to recent
accusations in price fixing.

For example, at the beginning of the current year, the local trading company Bartels-Langness accused Melitta of having formed a Germany-wide coffee roasting cartel with competitors Dallmayr, Kraft Foods (now Mondelez) and Tchibo between 2002 and 2008, which agreed on coffee prices. During this period, Melitta is said to have charged prices that were around 11 percent too high. Most of the companies declined to comment, however all of them believe the pressure from regulators on the market will continue to grow in Q4 of this year and in 2025.

Tea Struggles but Shows Resilience

Euromonitor’s Sidorenke added that similar to coffee, inflation is impacting Germany’s tea sector. “As inflation drives up the cost of everyday essentials, including tea, local consumers are making thoughtful choices in an attempt to manage their expenses. One prominent shift is towards private label and
discounters, where cost savings become paramount. Established tea brands are
responding by offering competitive promotions and discounts to retain their share.”

She said that at the same time, it would appear that the medium-priced segment is struggling the most, as consumers either turn towards cheaper options or they can still afford their favourite premium brands. “Although the cost-of-living crisis is forcing many consumers to reduce their expenses, tea remains popular, especially as it is considered a natural remedy to strengthen one’s immune system or simply for staying hydrated throughout the flu season.”

Germany-based tea manufacturers also said the existing problems seriously complicate their further development. Dirk Wollenhaupt, managing director o, which imports and blends teas, said the current situation remains complex, however the company sees potential for its further growth that will be achieved by the rise of efficiency of

Due to escalating costs, more German consumers are drinking coffee at home rather than in cafés.  “The German tea market is currently restrained and challenging. However, we expect a positive development in the medium term. The market has changed and the challenges have increased. In order to meet these challenges, we have adapted our processes and implemented many measures to increase efficiency,” he said, adding that being a producer of tea blends, Wollenhaupt has pursued a strategy of operational excellence over the past few months and orientated all processes towards being able to optimally serve its customers.

“The aspect of rapid availability and reliable, punctual delivery is extremely important in the tea market. We have invested intensively in the training and development of our staff and optimised production processes. In addition to
these measures, we have strengthened our sales activities with a sales office in the USA for the North American tea market,” Wollenhaupt explained.

Despite the existing problems, in its latest report Tee Report 2024, the German Tea & Herbal Infusions Association (GTHIA) revealed that most of local players have been able to adapt to the current realities of complex economics. Per the report, most medium-sized and family-run German tea companies were able to
consolidate and some even expanded their economic success in 2023-2024. The GTHIA said this was mainly due to their high-quality and innovative range, which enjoys big demand both in the domestic market and abroad.

The report finds that even though per capita consumption fell slightly in 2023 versus 2022, tea manufacturers have been able to record increasing sales. The GTHIA believes that is a sign of the strength of the German tea industry, noting that new, innovative products such as cold brew teas or functional teas, manufacturers are arousing the desire, especially among younger target groups.

Optimism for Future Growth

Even with the tough economics, most local producers and analysts expect that both coffee and especially tea sectors of Germany will resume its growth in the mid-term. On the product side, Dirk Wollenhaupt said there is the ever increasing demand for functional teas, ie, teas with additives such as melatonin, minerals and vitamins, and have greatly expanded our range in this area. “Other trends that we are observing in the German tea market and can serve with our products are wellness teas, iced teas, milk teas and mocktails with tea. The demand for high-quality green teas is also increasing. Sales of matcha in particular continue to grow in Germany due to its wide range of applications. With our partner in Japan and an extensive, high-quality range, we are very well positioned and are now one of the largest suppliers in Germany.”

He added that even though tea consumption in Germany fell slightly in 2023 compared to 2022, it remains at a high level. “Due to numerous new applications as an ingredient, as a beverage base or as a cocktail, we firmly believe that tea consumption will continue to rise in the medium term.”

As for coffee, most of local analysts expect the segment of caffeine-free coffee will provide a serious impetus for growth for the entire German coffee sector already during the period of 2024-2025. Mintel analysts report that more than half of 16 to 24-year-olds would welcome a larger range of caffeine-free products and would also be willing to pay more for such alternatives. This offers companies and brands opportunities for innovation in the area of low-caffeine and caffeine-free alternatives, for example in thecdrinking chocolate and tea segment.

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Consumers separate at home residual waste, organic waste, paper-cardboard, glass and packaging waste. Packaging waste needs to be sorted in a specific, blue-coloured recycling bin bag. Named the ‘Blue bag,’ the bags are for sale in supermarkets and convenience stores at an affordable price. Consumers fill them and they are collected at the doorstep at specific times, with a calendar per city and per area. More than 23kg of packaging waste (plastic packaging, metal packaging and drink cartons) per person is collected each year in Belgium. With this system of bags, packaging waste is separated from residual waste, with the aim to recycle it better. Today the blue bag is at cruising speed.

Through nationwide media and direct mail campaigns, Fost Plus informs citizens of new sorting initiatives. At the end of 2022, it announced that beverage capsules were allowed in the blue bag, collected at the door. This was revolutionary, as those capsules, technically speaking, are not packaging and needed specific operational adaptations in order to be sorted and recycled. Due to the capsules weight, the presence of grounds and their small size, a new sorting technology to sort the content of the blue bag per material type was implemented and new recycling outlets for that specific type was found. The project was initiated and financed by four coffee capsule producers: Delhaize grocery department chain with private label capsules, Nestlé/Nespresso, Nescafé and JDE Peet’s. Thanks to their efforts, the necessary technology to sort the capsules from the rest of the blue bag was implemented. New recycling markets were created to recycle this specific type of waste, overcoming the challenge to treat the residual coffee grounds in the capsules.

Over a year later, this new sorting method has already reached 80% of Belgians. Four out of ten capsules sold in the Belgium are recycled. The coffee capsules market and other beverage containers is booming, fuelled by the growing popularity of single-serve coffee among consumers. Capsules offer the convenience of brewing a single cup of coffee at a time, with customisable flavours and precise water and steam measurements. Additionally, an increasing variety of capsules are hitting the market, catering to tea, hot chocolate, and other hot beverages. The majority of these capsules are made of aluminium, an infinitely recyclable material in high demand in the recycling market. However, Fost Plus insists that plastic capsules also hold great recycling potential and are treated as well.

Biodegradable coffee capsules are not allowed in the bag reserved for biodegradable waste and must be thrown in the household trash. Why? Because biodegradation is not conclusive, according to the operators of the biomethanisation unit where Fost Plus’s organic waste is treated. It will be difficult for collectors to distinguish, through the bio bag, between plastic capsules (prohibited in the organic bag) or biodegradable ones.

Biodegradable capsules aside, Belgium has become one of the first countries to implement a nationwide and brand-independent recycling solution for beverage capsules, confirming its frontrunner position in recycling and waste treatment.

• Dominique Huret has been a journalist for the beverage & packaging sectors since 2005. She writes in French, English, and Dutch for several press groups. Huret is also the co-founder of Cape Decision consultancy based in Brussels, Belgium. She may be reached at dominique@capedecision.com.

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When you think about European coffee culture, your first thought is probably sipping espresso at the counter in Rome or café au lait on the boulevards of Paris or perhaps the vibrant specialty scene you can find on high streets across the continent.

And while hot coffee continues to dominate the European market, ‘the times they are changing’, with consumers increasingly seeking cold options. Within this, ready-to-drink (RTD) coffee is a particularly exciting space offering consumers convenience, innovation, and a fresh experience.

In this article, we will explore what is driving this trend, where the trend is most profound, where it is going next, and how players in the industry can capitalise on the growing ‘cold rush’.

What’s driving the ‘Cold Rush’?

One of the things we at Finlays love about the coffee industry is that it never stands still; there is a constant thirst for innovation and bringing new experiences to its consumers.

Nowhere is this seen more clearly than in the RTD coffee space, where we are seeing huge amounts of innovation to bring new experiences to consumers – and particularly younger consumers – who are seeking convenience, novelty and innovative flavour profiles and combinations.

Convenience is particularly influential. The ability for great tasting coffee, which can be enjoyed immediately, anywhere, at any time offers a huge benefit to consumers.

So, while Europe might trail the US market when it comes to RTD coffee, it is catching up fast.

Where is RTD coffee being embraced?

The key markets today are in Western Europe, where RTD coffee is reaching significant scale, with further high growth forecasted. Germany is currently the largest market and has reached over half a billion dollars (USD $501 million in 2023) with 6 percent CAGR predicted up to 2028.

The UK is hot on its heels, currently valued at $340 million, but with predicted growth at 15 percent CAGR between 2024 and 28, per Euromonitor International. In fact, according to Euromonitor, the UK is forecasted to reach over $700 million by 2028, which would make it the largest market in Europe.

Multiple emerging markets

There is good growth potential elsewhere as well, with the Netherlands, Spain, Switzerland, and Turkey all expected to reach over $250 million by 2028. We are also seeing RTD coffee emerging in markets with high coffee consumption, where younger populations are driving market trends (such as Turkey, Sweden, and Spain), and where there is a high dairy intake (Switzerland, Austria, and Belgium).

Turkey, for example, expects more than 19 percent growth between 2024 and 2028, with high popularity of RTD coffee products such as Nescafé’s Xpress.

Where is acceptance slow?

Uptake has been slower in Italy, where coffee consumption remains fairly traditional and penetration of multinational foodservice operators is lower, therefore not driving the overall trend for iced coffee as effectively. With that said, even in traditional coffee markets, we are seeing younger consumers in this market beginning to make the switch.

Cold brew vs iced coffee

Within RTD coffee, a segment we are particularly excited about at Finlays is cold brew. While this segment is still in its early days, high growth is predicted over the coming years.

And to be clear – it is not a question of cold brew versus iced coffee – there is plenty of headroom in the European market for both, catering as they do to different consumer needs. Cold brew’s flavour profile and perceived smooth taste make it a perfect solution for an elevated offering.

In fact, the critical challenge facing the cold brew segment is around consumer education of what cold brew is, and the benefits it offers compared to iced coffee. However, this is something we are now starting to see thanks to major foodservice operators such as Starbucks featuring cold brew on its menus.

Cold brew’s trajectory in Europe

To understand the future of cold brew coffee in Europe, it is useful to look to the US market where cold brew has experienced astronomical growth over the last ten years or so, and now accounts for a fifth of all consumer spending on RTD coffee in retail. In the US, lots of brands, such as Starbucks and Peet’s Coffee, are effectively balancing their portfolios with both iced coffee and cold brew to target different market segments and consumers.

Following that path, cold brew is starting to emerge across Europe, and particularly in the UK, as well as Germany, primarily being driven by younger consumers who are seeking an elevated experience.
However, until now, the European market has struggled with supply challenges, with accessibility of high-quality cold brew concentrates hampering growth.

What’s next for RTD coffee in Europe?

RTD coffee is a hugely exciting opportunity for brand owners in Europe, with high growth predicted over the coming years. Here are four key trends to watch out for:

1. The Cold Rush. Expect to see consumers continue to explore cold coffee options, establishing RTD as a firm favourite across Europe.
2. Blurring lines. The blurring of RTD coffee with energy drinks is another key dynamic, with coffee offering a strong and compelling alternative to traditional energy drinks.
3. Cold brew enters the mainstream. With companies such as Starbucks, Blank Street, as well as independent coffee shops now offering cold brew, the stage is set for cold brew to enter the mainstream. Cold brew’s visibility will only increase, driving consumer awareness and understanding of the unique benefits it offers.
4. Innovation. As always in the coffee industry, we expect to see a huge amount of exciting innovation in the category. Recent examples include Joe and The Juice offering cold brew tonics, the continued use of CBD for functionality, and of course, the continued fusion of coffee and alcohol in applications like RTD cold brew martinis.

It will be fascinating to see what other innovations we see over the coming years.

• Thom Walton is group head of marketing and communications at Finlays, a leading global supplier of tea, coffee and extract ingredients and solutions to brand owners, retailers, and foodservice operations. Starting his career in creative marketing, Walton joined Finlays in 2019 where he is responsible for global marketing and communications. He uses his personal passion for tea and coffee in all their formats to support Finlays to connect with their customers around the world.

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The Nordic instant coffee market is experiencing a serious stagnation, as the current dominance of ground coffee in the region has provides limited growth for major instant coffee producers.

In fact, the Nordic region, which consists of such highly developed European nations as Sweden, Norway, Denmark, Finland and Iceland to some extent, has long been known for its high coffee consumption, substantially exceeding even those in such coffee-drinking nations as Italy and France.

Similar to other EU nations, in recent years, the Nordic coffee market has undergone significant changes and experienced major transformation, which is primarily associated with the rise in popularity of ground coffee, as well as variety premium and specialty coffees. According to official market statistics, currently, the share of ground coffee is estimated at about 70 percent of the entire market, with the share of capsuled coffee and various specialty coffees being estimated in the range of 80 to 85 percent. The remaining 12 to 15 percent of the market accounts for the instant coffee segment, depending on the country. As a rule, the coffee market of each country in the region, including instant coffee segment, is characterised by high level of maturity with small room for a further growth of major players. As for the latter, Nestlé, with its flagship Nescafé brand, remains the leading company in the instant coffee market of the Nordic region.

In terms of Sweden – the major country of the region – according to a recent report prepared by the local coffee maker, Kafferosteriet Löfbergs (which is known as the first edition of the Coffee Report), four out of five Swedes drink coffee regularly, and ground coffee is undisputed as the leading choice, as 72 percent of local citizens drink it. The volume of imports into the country is rather small, mainly accounting for high-quality Arabicas.

Typical Norwegian coffee shop in the city of Oslo. Image: The JetSetting Fashionista

Specialty coffee and instant coffee account for the remaining 28 percent of the market. Instant coffee appeared in Sweden for the first time in 1942 during World War II.

According to the Swedish business paper, Orebronyheter, Swedes consume an average of 7.6 kilos of coffee per person per year, which corresponds to approximately 2.5 cups per day. That makes Sweden the world’s third largest country in terms of per capita coffee consumption.

Among the leading local players are Nestlé, Löfberg (its coffee factory in Karlstad also produces several instant coffee varieties including an espresso instant coffee called Bold Espresso, which is a dark roasted Arabica coffee), and Gevalia.

Finland still leads in consumption

The position of coffee in Finnish food culture is even stronger, which contributes to its record consumption. Coffee consumption in Finland remains the largest in the world. Over the decades, the amount of per capita coffee consumption in the country has remained steady, between 9-10 kilogrammes. Most local coffee companies do not believe that consumption will grow any further, so they seek growth through new premium products. Light-roasted coffee accounts for most of Finland’s market, but the popularity and supply of dark-roasted coffee has increased in recent years. Instant coffee’s share is estimated at 10 to 12 percent of the market.

The Russian-Ukrainian war and its economic consequences has led to a sharp growth of coffee prices in both Finland and Sweden in recent years. According to some Finnish media reports, the current prices for coffee in the local market are among the world’s highest, while a similar situation is also observed in Sweden. According to some independent coffee analysts, the high prices could provide a chance for instant coffee to retain its positions in the local market, mainly due to its more attractive price compared to ground coffee. Although, presently, the prospects for the segment’s further growth remain cloudy.

Salla Korpivaara, a senior consultant at Euromonitor International, said instant coffee in the Nordics remains a marginal category of the market. “Per capita consumption of instant coffee is more than 25 times smaller than fresh coffee. Traditionally, instant coffee has been used for special occasions, such as travelling, hiking, at summer cottages or for instance baking. I attach the volume growth for 2023 and forecast CAGR.”

She added that like in many other FMCG categories, “we saw a peak in retail sales during the pandemic when people were working from their summer houses. The growth, however, quickly returned to a normal, negative trend. In recent years, coffee beans and capsules are taking market space from instant coffee. We do know that instant coffee in the Nordics is more often consumed by the younger generation and they have a more positive perception of the category than older generations. This might be connected to videos on social media where people are preparing coffee cocktails with instant coffee.”

Little’s flavoured instant coffee has launched in several markets. Image: Little’s

According to Korpivaara, an impetus for the segment could be provided by more active launches of innovative products into the market, while some activities in this field are already ongoing. She said there has been little product innovation in instant coffee in recent years but there are some premium examples:

• Little’s flavoured instant coffee has launched in several markets and there is a wider trend for flavoured instant standard coffee (not mixes);
• Fairtrade, premium and organic products are being launched from time to time.

Given the high inflation the past few years, Korpivaara noted another trend is the rise of private label. “Coffee prices increased by double digit growth in 2022, slowing down a little in 2023, we see that consumers have been downtrading here.”

According to analysts, there was a ‘renaissance’ of instant coffee in the Nordic region between 2015 and 2019 when, according to data of Nestlé and some other global majors, the demand for instant coffee in some countries of the region – such as Finland – grew at 5 to 6 percent in some years and even higher in others. Thus, there were serious expectations that such a trend would continue to be observed during the 2020s. Still, a sharp rise in popularity of ground and specialty coffees, especially among the young, and the highest growth in coffee shops since 2010 in all of Europe, put an end to the hopes of further growth of the instant coffee segment, at least with the same rates during the next decade.

Norway and Denmark: same region but consumption habits differ

Coffee is considered a national drink in Norway, although the consumption of most of its varieties in this country is lower than those in Finland. According to the Norwegian Coffee Information agency, consumption in Norway among coffee drinkers is around four to five cups per day. Of these, the share of instant coffee also does not exceed 15 percent of the market.

Since the early 2000s, the consumption of coffee in Norway has been slowly decreasing, which affects both ground and instant coffee varieties.

Surprisingly, the current situation in the coffee market of Denmark is quite different, as, in contrast to other Nordic nations, there is a generally stable growth of demand for instant coffee among local customers.

Swedish Löfbergs organic instant coffee, one of the most popular instant coffee varieties in the Nordic region. Image Löfbergs

Presently, sales of instant coffee products in Denmark show serious growth because it has become the preferred coffee model among many young people. According to a study from 2024 of the Danish magazine, Kaffe Drikke, the best-selling coffee brand in Denmark is Nescafé, which has long been popular among Danes. In addition, other instant coffee brands, such as Merrild and Jacobs, are also popular in Denmark. Currently, instant coffee accounts for about a quarter of total coffee sales in Denmark, with younger people often preferring more exotic coffee varieties, while older people often stick with more classic varieties.

Euromonitor International analysts expect the demand for instant coffee in the Nordic region will remain generally stable within the next several years, although further growth of the market will be weak, while the demand for premium and specialty coffee will grow.

A spokesperson for Euromonitor International summed up the instant coffee segment in the Nordic states, noting, that overall, instant coffee is projected to see a flat off-trade volume CAGR in the future. “This is expected to be mainly due to instant coffee mixes, which offer more product variety and attributes, such as flavours. Instant standard coffee, on the other hand, is unlikely to see much new product development to stimulate interest. However, it is worth nothing that instant coffee mixes are predicted to see off-trade volume growth, before a level of maturity sets in. Meanwhile, instant standard coffee is expected to see declines until margins pick-up, albeit from a reduced sales base.”

• Eugene Gerden is an international freelance writer who specialises in covering the global coffee, tea and agricultural industries. He works for several industry titles and may be reached at gerden.eug@gmail.com.

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In 2023, over 20% of Nescafé’s coffee was sourced from farmers implementing regenerative agriculture practices. This data is based on the monitoring and impact assessment provided by the Rainforest Alliance, across farmer groups in 11 coffee origins, from where Nescafé sources its coffee. As a result, farmers in countries such as Honduras, India, Philippines, Thailand, and Vietnam achieved a 5% to 25% increase in coffee productivity per hectare compared to 2022. Key practices that contributed to this increase included optimised fertilisation and mulching. The implementation of these practices also led to a reduction in GHG emissions per kilogramme of coffee, ranging from 15% to 30%. In 2023, the Nescafé Plan distributed 21 million coffee plantlets to farmers to help renovate and rejuvenate coffee plots and improve productivity, in coffee origin countries.

Philipp Navratil, head of Nestlé’s Coffee Strategic Business Unit, said: “The Nescafé Plan embodies our unwavering commitment to help secure the future of coffee. This is at the heart of Nescafé. This second progress report is a testimony to the work we do every day on the ground with our partners, suppliers, and farmers, in the regions from where we source our coffee, and it motivates us even more to continue our efforts.”

Prioritising knowledge transfer and expertise building is essential to increase the uptake on regenerative agriculture. In 2023, more than 140,000 coffee farmers across 16 coffee origins received comprehensive training in regenerative agriculture practices as well as technical assistance. In Honduras, for example, 12,000 younger generation coffee farmers received training on entrepreneurship, quality, and regenerative agriculture, supporting the next generation of farmers to manage their farms more productively.

Recognising the importance of peer-to-peer learning, the Nescafé Plan launched an innovative online platform called Agrinest. This platform aims to connect farmers from around the world, facilitating knowledge sharing and collaboration. Currently, more than 1,600 farmers in Vietnam and 240 farmers in Indonesia are actively using Agrinest, with a growing trend of participation expected in the coming years.

Nestlé has also contributed to the Regenerative Agriculture for Low-Carbon and Resilient Coffee Farms – A Practical Guidebook. This guidebook, created in collaboration with the Alliance of Bioversity International and the International Center for Tropical Agriculture (CIAT), provides field agronomists, trainers and professionals working with coffee farmers with a set of best practices that they can use and adapt to different farming contexts, helping farmers transition to regenerative agriculture. The guidebook is publicly available to the coffee sector.

The Nescafé Plan 2030 aims to issue a progress report every year to update on the brand’s work in helping coffee farming communities transition to regenerative agriculture practices and, as a result, to help improve their livelihoods. This the second Progress Report issued since the launch of the Nescafé Plan 2030.

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Tapping into this growing trend, Nescafé launches its new Nescafé Espresso Concentrate. Designed to capture the out of home cold coffee experience, this premium liquid coffee concentrate brings barista-style personalised iced coffees to consumers’ homes. Here’s how:

• Customisable: consumers can simply add a small shot of Espresso Concentrate to milk, to have a creamy iced Latte, to water for a robust Americano, or even mix it in a refreshing twist with a lemonade or juice.
• Quality coffee: a blend of selected coffee varieties roasted and brewed to deliver a rich and bold taste.
• Uncomplicated: no special equipment or barista skills needed.

Philipp Navratil, head of Nestlé’s Coffee Strategic Business Unit, said, “Young coffee consumers start drinking their coffee cold. With the Nescafé Espresso Concentrate we want to capture the growing out of home cold coffee trend and bring it in-home, with a quality premium cold coffee, in a convenient, simple, and customisable way.”

Damien Tissot, head of Nestlé R&D for Coffee added, “At Nestlé we leveraged our state-of-the-art coffee roasting and brewing technologies across roast and ground, soluble, ready-to-drink and portioned coffee formats. With the Nescafé Espresso Concentrate we build on our expertise to create tasty and convenient coffee-at-home experiences for cold consumption.”

The Nescafé Espresso Concentrate is currently available in two flavours: Sweet Vanilla and Espresso Black.

The Nescafé Espresso Concentrate is launching this month in selected retailers in Australia, in bottle format, and in e-commerce platforms in China as a single serve pod to pour over milk, water, or juice. It is set to expand to markets worldwide over the coming years.

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Mexico eyes becoming one of the leading players in the global coffee market, which will take place by increasing both domestic consumption and exports.

Despite a tough economic environment, the demand for coffee and its consumption in Mexico remains strong, which is also leading to the growth of its local production.

According to the Mexican Ministry of Agriculture and Development (SADER), coffee is a strategic crop in Mexico — its production currently employs more than 500,000 producers from 15 states and 480 municipalities. In total, 94.1 percent of its coffee production is located in five provinces: Chiapas, Veracruz, Puebla, Oaxaca and Guerrero. More than 92 percent of the coffee supply comes from small producers, who grow coffee on less than two hectares.

SADER figures indicate that Chiapas is the main producing state, contributing 41.3 percent followed by Veracruz with 24.4 percent, and Oaxaca with 8.2 percent. Coffee currently represents 0.66 percent of Mexico’s national agricultural GDP (gross domestic product) and 1.34 percent of the overall production of agro-industrial goods in the country. Still, this is just the beginning, as state plans include creating conditions to increase both coffee production and consumption within the next several years.

In accordance with Mexico’s National Agricultural Planning, it is estimated that in 2030, national consumption will increase from 0.80 to 0.94 million tonnes, and that national production will expand from 0.82 to 4.7 million tonnes. Exports should also grow, which will allow Mexico to re-enter the ranks of the world’s top-ten largest coffee producers and exporters. It currently stands in eleventh place.

As for coffee retail sector, according to data presented during Expo Café 2023, the coffee industry’s main event in Mexico, the coffee sector grew by 5 percent in 2023. That was mainly due to local consumption jumping from 230,000 tonnes in 2020 to 311,000 tonnes in 2022, an increase of 37 percent. In 2023 the consumption exceeded 320,000 tonnes.

In addition to more than 500,000 producers, Mexico’s coffee sector consists of more than 75,500 coffee shops, the number of which is constantly growing.

According to analysts’ predictions, there could more than 80,000 cafeterias by the end Q1 2024, with annual growth between 5 percent and 7 percent in terms of new units, capable of employing more than 377,000 Mexicans (averaging five people per cafeteria).

In general, coffee shops are presently one of the most profitable businesses in Mexico, which attracts many domestic and foreign entrepreneurs.

Most coffee shops are concentrated in the country’s four largest cities – Mexico City (the capital), Jalisco, Guanajuato and Puebla – which all together make up about 45 percent of those establishments throughout Mexico.

Producers under pressure

Mexico is currently ranked as the ninth biggest coffee-producing country in the world (in terms of land) with the harvested area of 646,00 hectares (ha) and with a production of about 987,000 tonnes.

However, experts of the Mexican Institute of Ecology, Inecol, have recently warned that despite its coffee sector maintaining generally good results the past few years, the current tough economic situation in Mexico has put a serious pressure on Mexico’s coffee farmers, some of which may declare bankruptcy in the short-term, which is mainly due to low incomes (earning 75 percent below the national minimum wage), the lack of state support, and climate change.

Coffee shops such as Cafe Negro in the city of Coyoacan, continue to open around Mexico. Image: Mexplora

Analysts report that coffee yields in Mexico are among the lowest in Latin America (five to seven quintals per ha), which led to the country dropping from once being the fourth largest coffee producer in the world to the eleventh.

Multinationals show interest

Most independent analysts believe that despite the existing challenges, Mexico’s coffee and tea sectors recorded generally good results last year and have prospects for further growth in 2024.

According to Alberto Trueba, research & data analyst at Euromonitor International, in the case of coffee, in 2023 there was a 2 percent volume growth in the retail category on a year-on-year basis. “In general, [locals] are becoming more cautious in their spending habits. However, the desire for a delightful cup of coffee persists. Currently, more and more local people prefer to consume more coffee at home, while seeking new flavours or experiences with each cup.”

Historically, the Mexican coffee sector has been within the sphere of interests of global players. In recent years, many of them have significantly strengthened their positions in the local market, planning further expansion.

One such company is Nestlé, which remains one of the leading players in the Mexican coffee sector, providing active support to local farmers through the various local programmes, such as Nescafé Plan 2030. There are 80,000 Mexican producers who are part of the Nescafé supply chain. Through its Nescafé Plan 2030, Nestlé has been cooperating with academic and research institutions to establish better coffee plants, training for producers, and technical assistance.

Nestlé opened a new Nescafé factory in Veracruz Mexico in 2022, making Mexico Nestlé’s main coffee producer globally. Image: Nestlé

Nestlé is the number one buyer of coffee in Mexico, buying 30 percent of the national production from more than 80,000 producers. In addition, the company recently launched a number of new products across different categories such as Dolce Gusto coffee capsules with Starbucks Vanilla Madagascar and White Mocha flavours. Nescafé also introduced Nescafé Ice, a variant of its flagship product, which is the first instant coffee in Mexico designed for cold preparation.

However, Nestlé is not the only global player that is actively expanding in the Mexican market. Another is The Coca-Cola Company’s Costa Coffee, which recently introduced its new coffee machine to the market. This machine offers a level of beverage personalisation akin to what a barista would provide.

Tea: small but growing

In case of tea, in Mexico and Latin America, tea consumption has increased continuously over the last ten years, but even so, there are few people who consume this drink regularly, so the opportunities for growth and development in the industry are enormous. A significant part of local needs in tea is met by imports.

According to data from Mexico’s food title, TheFoodTech, Mexico’s annual tea imports vary from 1,200 to 1,400 tonnes, making it the second largest tea importer in Latin America, behind only Chile. The Mexican tea market is estimated at USD $79.3 million, with the possibility of reaching $98 million by 2026. The leading brands are those that are sold by large retailers. The main players are La Pastora, with 20.1 percent of the market; McCormick, with 19.4 percent; and Therbal, with 18.2 percent.

While tea consumption in Mexico is growing, it is still small as there is no tea culture in the country. Mexicans consume 12 grams of tea a year, the equivalent of six cups. By comparison, in Turkey, the country that drinks the most tea, consumption per person per year is around 3 kilograms, per Euromonitor International.

Trueba noted that there was a 0.3 percent volume growth in retail in 2023, exceeding the figures from 2022. “In terms of value, there was a 1.3 percent growth, also higher than in 2022. The slight growth of the tea category can be attributed to various factors, including health trends observed since the Covid-19 pandemic.”

Euromonitor International’s Voice of the Industry: Food and Nutrition Survey in 2023 found that 65 percent of the food and beverage companies in Mexico consider the use of natural ingredients, less processed ingredients, and additives with additional functionalities to be very or extremely influential in the coming years. This trend has significantly impacted the entire category, with particular emphasis on green tea, which experienced the highest growth in both value and volume in 2023.

Similar to the coffee category, people are increasingly consuming tea at home. Despite many individuals returning to their pre-pandemic routines of full-time work and school, they also seek to spend more time at home with family or alone,” said Trueba. “According to our Voice of the Consumer: Lifestyles Survey in 2023, 28 percent of Mexican consumers seek to spend more time taking care of themselves, often aligning with the consumption of indulgent products. This has driven the consumption of tea at home, replicating drinks from the foodservice channel.”

The importance of e-commerce

Euromonitor and other interviewed experts also anticipate e-commerce playing a supporting role in coffee and tea growth due to its inherent advantages and convenience.

Success will also depend on effective brand positioning, given the inclination of coffee and tea consumers to remain loyal to their preferred brand and their minimal tendency to switch to more affordable alternatives, driven by the paramount importance placed on taste. Consequently, social media will continue to play a pivotal role in brand-positioning campaigns.

Coffee grown in Mexico’s Oaxaca region. Image: Primera Coffee

Euromonitor also expects social media to be instrumental in promoting premium products, such as Dolce Gusto’s coffee capsules designed for cappuccino with lactose-free milk. The upward trajectory of this trend is expected to endure in the coming years, driven by the growing influence of social media in the Mexican market and its facilitation of enhancing the positioning of new or existing products.

Most analysts believe Mexico’s coffee market will continue growing in 2024, driven mainly by new product launches that focus on indulgence and convenience. The introduction of Nescafé ICE, the first instant coffee for cold preparation, and Dolce Gusto Frappé coffee capsules for homemade frappés, are part of this trend.

Regarding the tea sector, Euromonitor reports that growth will also be observed both in value and volume terms, with a 2.2 percent increase in both cases, surpassing the figures seen in 2023. These growth projections are supported by the relaunch of existing products or the introduction of new ones, where functional ingredients will play a significant role.

Health trends will continue to drive growth in the category, as tea is perceived as a healthy beverage. Brands such as Lagg’s emphasise the benefits of their wellness line on packaging, highlighting infusions like Sleeping Time and Gastro Plus.

Moreover, the growth of the category is expected to be supported by several brands promoting tea consumption in various social scenarios, emphasising an experiential aspect beyond the act of drinking tea. For instance, Twinings underscores in its advertising campaigns that its products can be consumed hot, cold, or as mocktails.

• Eugene Gerden is an international freelance writer, who specialises in covering the global coffee, tea and agricultural industries. He works for several industry titles and may be reached at gerden.eug@gmail.com.

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Climate change is putting coffee-growing areas under pressure. Smallholder coffee farmers are exposed to the risk of irregular weather conditions that can affect their crops.

On the occasion of International Coffee Day, Nestlé announced that it is piloting a weather insurance programme in Indonesia for more than 800 smallholder coffee farmers that supply coffee to its brand, Nescafé. The company is launching the insurance scheme in collaboration with Blue Marble, a specialist in climate insurance. The insurance provides financial protection to help farmers cope with unpredictable weather patterns of rainfall and severe drought.

Marcelo Burity, global head of Nestlé’s green coffee development, said, “This weather insurance helps to establish a support mechanism for smallholder coffee farmers in Indonesia. It allows them to access financial resources to re-establish their crops in the event of irregular weather conditions while building resilience in coffee farms.”

The insurance uses satellite-based climate data to determine when coffee output has been impacted by either too much or not enough rainfall during key phases of the crop cycle. Payments are issued automatically to registered coffee farmers that have been affected, according to the severity of the weather.

“Smallholder coffee farmers in Indonesia are vulnerable to climate risks and need access to insurance to protect against extreme weather events,” said Jaime de Piniés, CEO of Blue Marble. “We are proud to partner with Nestlé and its brand Nescafé to develop innovative ways to support the climate adaptation of smallholder coffee farmers and their families.”

This initiative is an integral part of the Nescafé Plan 2030, the brand’s vision to support the long term sustainability of coffee and to help improve farmers’ livelihoods. Based on the results of the pilot, Nestlé will determine whether to expand the approach to other Nescafé sourcing locations around the world.

Sharing knowledge to accelerate the transition to regenerative agriculture

Changing agricultural practices requires access to knowledge and time to learn and implement. By moving to regenerative agriculture, coffee farmers can help restore soil health, reverse biodiversity loss, and strengthen ecosystems. Doing so also helps reduce the amount of greenhouse gases released into the atmosphere.

Nestlé, has contributed to the ‘Regenerative Agriculture for Low-Carbon and Resilient Coffee Farms – A Practical Guidebook,’ developed by the Alliance of Bioversity International and the International Center for Tropical Agriculture (CIAT). This guidebook provides field agronomists, trainers and professionals working with coffee farmers with a set of best practices that they can use and adapt to different farming contexts, helping farmers transition to regenerative agriculture. These best practices include agroforestry, intercropping, soil conservation and cover crops, integrated weed and pest management, integrated nutrient management, efficient water use, waste valorisation, landscape actions and the rejuvenation of coffee trees with well adapted varieties.

Pascal Chapot, global head of sustainable agriculture development at Nestlé, said, “The guidebook gives coffee farmers a set of field actions they can implement tomorrow to help them become more resilient to climate change and to diversify their sources of income. Knowledge is key, and we hope that this guidebook makes these regenerative agriculture practices more accessible to farmers and supports an accelerated transition towards them. This is essential to tackling the climate challenges ahead.”

Mirjam Pulleman, senior soil ecologist and co-author of the guidebook said, “Creating real impact on the ground requires learning from real experiences with farmers in different origins and providing incentives to support farmers in their journey. The best practices highlighted in the guidebook are a starting point. Each practice will need to be tailored to the specificities of each country of origin, the different farm types, the surrounding landscapes and the resources available.”

From Nestlé’s perspective, the guidebook complements the Nestlé Regenerative Agriculture Framework (pdf, 18Mb). Nestlé considers regenerative agriculture to be a key component of its efforts to reduce greenhouse gas emissions and to reach net zero by 2050. It is also a central pillar of its coffee sustainability programmes, the Nescafé Plan 2030 and the Nespresso AAA Sustainable Quality programme.

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“This targeted co-funding by our membership kick-starts our work, catalysing transformational change around living income, climate adaptation and sustainability for over one million coffee farmers around the world,” announced GCP executive director, Annette Pensel. “Today, we celebrate the commitment of JDE Peet’s, Melitta Group, Mother Parkers’ Coffee & Tea, Nescafé, Nespresso, ofi (olam food ingredients), Rabobank and Westrock Coffee Company. These companies are taking collective action to the next level to propel coffee sustainability.”

GCP 2.0’s farmer-centric approach entails focused local collective actions in coffee producing countries together with local stakeholders, complemented with a global drive to increase sustainable sourcing.

Sharing responsibility

Despite many years of efforts and certain sustainability advancements, the sector is still facing profound challenges to sustainability. More than half of coffee farmers around the globe are challenged by poverty, and coffee supply is threatened by climate change and increasing regulatory requirements.

“To unlock coffee’s potential as both an engine of socio-economic growth and nature-based solution to climate change, we urgently need transformational change with strategic action and bold investments within supply chains and, importantly, beyond it. Durable change comes only with focused solutions that are owned by coffee growers themselves, supported by public, private and NGO partners.”

Collective action locally and globally

“GCP has demonstrated that change beyond supply chains is possible when GCP Member companies work with our NGO and government partners through collective action,” says GCP board chair, Carlos Brando. “This pre-competitive collaboration is crucial to generating adequate level of investment and change. No one company can be effective by itself. Collective action is essential to not just ensuring compliance but also accelerating measurable sustainability at scale.

“We are grateful that these GCP Members have stepped forward with this initial round of co-funding. This will lay the groundwork to bring ambitious solutions to over one million coffee smallholders.”

The combined $1.5 million investment enables GCP to grow, attracting new talent and further revenue, including public co-funding that is key to accelerate the first six entrepreneurial country programmes to investment-ready levels and support the development of aligned measurement in the form of GCP Country Reports.

“While achieving transformational change on farmers prosperity for one million coffee farmers seems like an ambitious goal, today marks an exciting first milestone for GCP and an indication that we can transform the industry together,” said Pensel.

For more information click here.

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Recently adopted practices include intercropping, mulching and integrated weed management. In 2022, the Nescafé Plan 2030 farmer trainings on regenerative agricultural practices reached more than 100,000 farmers in 14 countries. In addition, 1.4 million trees were planted in and around coffee farms that supply coffee to Nescafé, providing shade to prevent coffee’s over-exposure to the sun and additional revenue sources for farmers.

Rejuvenation of coffee trees is key to improving the yields of coffee farms. In 2022, Nescafé distributed 23 million disease and drought-resistant, high-yield coffee plantlets to help rejuvenate coffee plots, increase productivity and reduce the use of agrochemicals.

Philipp Navratil, head of Nestlé’s Coffee Strategic Business Unit said, “The Nescafé Plan 2030 Progress Report shows the potential of regenerative agriculture to help make coffee farming more sustainable over the long term. We are supporting coffee farmers to make this transition and are giving them the know-how and tools they need to increase yields and income, while helping reduce carbon emissions at the same time.”

Climate change is the number one concern for coffee farmers in the 14 countries assessed by the Rainforest Alliance. It is followed by high input costs and low raw material prices. Most farmers say that the main reasons for the Nescafé Plan’s success are its consistent and high-volume purchases, regular technical assistance on the ground and access to markets.

The Nescafé Plan 2030 is piloting financial support schemes to help farmers transition to more sustainable practices. The pilots have engaged around 3,000 coffee farmers in Côte d’Ivoire, Indonesia and Mexico, countries where farmers earn, on average, less than a living income. These pilots include testing conditional cash incentives to reward the transition to regenerative agriculture and the rejuvenation of coffee plots as well as weather insurance schemes to protect farmers’ income against the unexpected effects of climate change. Although the pilots are still ongoing, Nescafé is seeing encouraging results and strong farmer engagement.

Yustika Muharastri, monitoring and evaluation manager from the Rainforest Alliance said, “The Rainforest Alliance works with the Nescafé team to monitor and assess their efforts through the Nescafé Plan. We have observed encouraging trends, including improved incomes in some countries, and increased adoption of important regenerative practices, such as integrated weed and pest management. We are excited that our ongoing collaboration will continue to provide valuable insights to the Nescafé Plan, further supporting its ambition to improve the livelihoods of many more coffee farmers.”

The Nescafé Plan 2030 aims to issue a progress report every year to provide an update on the evolution of its work in helping coffee farming communities transition to regenerative agriculture practices and improve their livelihoods.

Read the Nescafé Plan 2030 Progress Report (pdf, 12Mb)
Read the Rainforest Alliance Impact Assessment

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Today, 15% of coffee in the world is drunk cold, with the majority of this consumed by younger people, especially Generation Z. In line with this trend, there is rising demand for products that allow people to recreate café-style cold coffee experiences in the home.

Nescafé Ice Roast is launching in China this month, with Mexico to follow. Working closely with Nestlé’s coffee business and its markets, experts at Nestlé’s coffee R&D center in Orbe Switzerland, crafted this new product from bean to cup.

Starting with 100% Robusta coffee beans, grown and produced sustainably, Nestlé’s teams tailored the roasting profile for a lightly roasted soluble coffee without harsh or bitter notes. They optimised the extraction process for a refreshing taste and clear appearance in the cup and perfected the coffee granule structure, so it dissolves quickly and easily.

Damien Tissot, head of Nestlé’s Product Technology Center Coffee in Orbe, Switzerland, said: “With Ice Roast, we’ve created a light-medium roast that’s ideal to drink cold, with a smooth texture and cocoa notes that unlocks new sensory territory. By applying an innovative mindset, our teams have created a new sensory experience in cold coffee.”

Donald Howat, global category lead for Nescafé, said: “Cold coffee is hot, with a new generation of coffee drinkers entering the category through cold. We’re really excited by this launch, because Ice Roast gives them the opportunity to enjoy an even better cup of cold coffee at home and recreate their favorite drinks.”

Other recent launches include Nescafé Black Roast, Nestlé’s most intense coffee ever, and Nescafé Roastery Collection, a super-premium soluble coffee. Currently sold in Nigeria, Nescafé Malty is an accessible 3-in-1 blend that balances Nescafé coffee with millet malt, for a rich, creamy blend suited to local tastes.

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With its new proprietary and patented coffee system, refined over five years at Nestlé’s R&D Center for Systems in Switzerland, Nescafé Dolce Gusto Neo delivers high-quality coffee, in a compostable pod, with no compromise on taste. Its proprietary SmartBrew technology combines three brewing methods so that consumers can enjoy, high-quality espressos, coffeeshop-like americanos and drip-style coffees, in one single machine, at the touch of a button and in the convenience of their homes. Neo automatically recognizes the pod, adapting the brewing method to each selected coffee.

Neo’s paper-based pods are certified for composting, both home and industrial, by TÜV Austria, an international certification body. These new pods are made from 1g of paper certified by Forest Stewardship Council (FSC) suppliers with a compostable biopolymer lining – thinner than a human hair – to help protect Nescafé Dolce Gusto’s Neo coffee quality and freshness from oxidation. As with all Nescafé Dolce Gusto coffees, Neo is 100% responsibly sourced.

David Rennie, head of Nestlé Coffee Brands, said: “Nestlé is a relentless innovator in the coffee category. We are continuously looking to bring consumers new experiences, variety and quality in their coffee, in a sustainable way. With Nescafé Dolce Gusto Neo, we have created the perfect combination of a great coffee experience, new coffee system and packaging, all in one.

Arnaud Deschamps, head of Nescafé Dolce Gusto, said: “In a time of rapid change, we see increasing expectations about coffee variety, versatility, personalization, and sustainability, with no compromise on quality and taste. With Neo, we have designed a ‘Coffee Shop at Home’ experience that aims to meet the expectations of today’s most passionate coffee lovers. Every aspect of Neo has been carefully considered – the machine technology, the user interface, the coffee and our first home-compostable paper-based pods. Neo represents the long-term future of our brand.”

Julia Lauricella, head of Global R&D Center for Systems and Coffee Machines, said: “Whenever we develop a new system, we need to harmonize its three key elements for the perfect in-cup result: the product, its packaging and the machine. We carefully select the coffee, and together with the Nestlé Institute of Packaging Sciences, choose and design the packaging to protect it, and develop the machine to ensure the perfect synergy during extraction. For Neo, our teams tested over 200 novel material structures before perfecting the paper-based pod. Our proprietary SmartBrew system tunes the extraction parameters for each beverage, and you can even personalize your cup through the connected application.”

Thanks to the ability to connect the machine to a smartphone, consumers can even personalize their coffee preparation at a distance. Nescafé Dolce Gusto’s loyalty program offers rewards and personal recommendations adapted to the consumers profile each time a coffee is prepared.

The coffee machine itself is made of 50% recycled plastic (for non-food contact parts) with the thermoblock (which heats the water) made of 85% recycled aluminium. It is designed to be more convenient to dismantle and repair, with an A++ energy class rating, and a switch-off eco-mode.

Neo is launching in Brazil this year with plans to expand to more countries over time. The new paper-based capsules are entirely produced in Nescafé Dolce Gusto’s factory in Montes Claros, Brazil. Montes Claros is the first Nestlé factory to receive Nestlé’s internal sustainability certification ‘Triple Zero’ for three dimensions: water, waste creation and greenhouse gas emissions. Nestlé will invest more than CHF 50 million (R$300 million) in Brazil’s Montes Claros factory to support the Neo launch.

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The brand is investing over one billion Swiss francs by 2030 in the Nescafé Plan 2030. This investment builds on the existing Nescafé Plan as the brand expands its sustainability work (pdf, 8,65Mb). It is supported by Nestlé’s regenerative agriculture financing following the Group’s commitment to accelerate the transition to a regenerative food system and ambition to achieve zero net greenhouse gas emissions.

“Climate change is putting coffee-growing areas under pressure. Building on 10 years’ experience of the Nescafé Plan, we’re accelerating our work to help tackle climate change and address social and economic challenges in the Nescafé value chains,” said David Rennie, head of Nestlé coffee brands.

Rising temperatures will reduce the area suitable for growing coffee by up to 50% by 2050. At the same time, around 125 million people depend on coffee for their livelihoods and an estimated 80% of coffee-farming families live at or below the poverty line. Action is needed to ensure the long-term sustainability of coffee.

“As the world’s leading coffee brand, Nescafé aims to have a real impact on coffee farming globally,” said Philipp Navratil, head of Nestlé’s coffee strategic business unit. “We want coffee farmers to thrive as much as we want coffee to have a positive impact on the environment. Our actions can help drive change throughout the coffee industry.”

Supporting farmers’ transition to regenerative coffee farming

Regenerative agriculture is an approach to farming that aims to improve soil health and fertility – as well as protect water resources and biodiversity. Healthier soils are more resilient to the impacts of climate change and can increase yields, helping improve farmers’ livelihoods.

Nescafé will provide farmers with training, technical assistance and high-yielding coffee plantlets to help them transition to regenerative coffee farming practices. Some examples of regenerative agriculture practices include the following:

Planting cover crops helps to protect the soil. It also helps add biomass to the soil, which can increase soil organic matter and thus soil carbon sequestration.
Incorporating organic fertilizers contributes to soil fertility, which is essential for good soil health.
Increasing the use of agroforestry and intercropping contributes to biodiversity preservation.
Pruning existing coffee trees or replacing them with disease and climate-change resistant varieties, will help rejuvenate coffee plots and increase yields for farmers.

Focusing on origins from where Nescafé sources 90% of its coffee

Nescafé will be working with coffee farmers to test, learn and assess the effectiveness of multiple regenerative agriculture practices. This will be done with a focus on seven key origins, from where the brand sources 90% of its coffee: Brazil, Vietnam, Mexico, Colombia, Côte d’Ivoire, Indonesia and Honduras.

Nescafé aims to achieve:

• 100% responsibly sourced coffee by 2025 (pdf, 8,65Mb)
• 20% of coffee sourced from regenerative agricultural methods by 2025 and 50% by 2030 as part of Nestlé’s ambition for its key ingredients

Piloting a financial support scheme in Mexico, Côte d’Ivoire and Indonesia to accelerate the transition to regenerative agriculture

Nescafé is committed to supporting farmers who take on the risks and costs associated with the move to regenerative agriculture. It will provide programs that aim to help farmers improve their income as a result of that transition. In Mexico, Côte d’Ivoire and Indonesia, Nescafé will pilot a financial support scheme to help farmers accelerate the transition to regenerative agriculture. Through this scheme, Nescafé, together with coffee farmers, will test and learn the best approach in each country. These could include measures such as:

• conditional cash incentives for adopting regenerative agriculture practices
• income protection using weather insurance
• greater access to credit lines for farmers

Nescafé will track the progress and assess the results of its field programs with coffee farmers through its Monitoring and Evaluation partnership with the Rainforest Alliance. Its efforts will be complemented by new and expertise-focused partnerships, like the one with Sustainable Food Lab for topics related to coffee farmers’ income assessment, strategy and progress tracking.

Reducing greenhouse gas emissions also by capturing and storing more carbon in the soil

Regenerative agriculture also contributes to drawing down carbon dioxide from the atmosphere and reducing greenhouse gas emissions. That’s why regenerative agriculture is a key part of Nestlé’s Zero Net roadmap. Nescafé aims to contribute to Nestlé’s Zero Net commitment to halve greenhouse gas emissions by 2030 and reach zero net greenhouse gas emissions by 2050. It will work with farmers, suppliers and partners to help protect agricultural lands, enhance biodiversity and help prevent deforestation. The brand intends to help farmers plant more than 20 million trees at or near their coffee farms.

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Special guest Andrés Manuel López Obrador, the president of Mexico, attended the factory’s opening event. He commented, “With the inauguration of this plant, Nestlé is supporting close to 100,000 coffee producers in Mexico. This demonstrates the importance of the public and private sectors working together to bring investment to our country.”

The new factory leverages state-of-the-art equipment and green energies to reduce water and energy consumption. It uses wastewater treatment systems to ensure 100% of water recirculation, zero wastewater discharges and zero waste to landfills. And it consumes 100% green electricity and is equipped with a biomass boiler that will use the biological waste from the coffee process to generate energy.

“The coffee factory is one of the most technologically advanced in the world and our company’s most modern and sustainable coffee plant,” said Fausto Costa, executive president of Nestlé Mexico. “At Nestlé, sustainability is a fundamental pillar of our purpose, and we are committed to taking actions that have a positive impact on our planet.”

Through the Nescafé Plan, coffee growers from whom Nestlé sources have access to the advice of specialists. Nestlé’s global initiative supports the sustainable production and supply of green coffee, strengthens small producers’ production capacity and promotes the economic and social development of their families and communities. The Nescafé supply chain comprises 80,000 Mexican coffee growers, and Nestlé has pledged to ensure that by 2025, 100% of the coffee it purchases is responsibly sourced.

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The coating or ‘ganache’ that covers the Nescafé Gold Cappuccino Ice Cream is made using Nestlé’s patented ‘soft coating’ technology. In contrast to the hard coatings used in typical chocolate-based stick ice creams, this soft ganache uses Nescafé Gold coffee, which also features in the ice cream core.

Guglielmo Bonora, head of Nestlé R&D Singapore, said: “Leveraging this ‘soft coating’ technology, our teams met the challenge of finding the perfect balance between ‘coffee-ness’, milkiness and sweetness, to bring the Nescafé Gold Cappuccino experience to life!”

“The ganache is designed to melt at a similar rate to the ice cream core, so people can better enjoy the release of sweetness and coffee from the coating, alongside the ice cream.”

Global Head Confectionery and Ice Cream Strategic Business Unit, Alexander von Maillot, said: “We didn’t just want to make a coffee-flavored ice cream, but rather take the Nescafé coffee experience and recreate it in the ice cream category. This indulgent, premium ice cream is the perfect treat for consumers.”

Sold in a paper wrapper that is designed to be recycled via the paper stream, Nescafé Gold Cappuccino Ice Cream will be sold in Malaysia over the next few months, with a view to possible rollouts in further Nestlé ice cream markets worldwide.

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Collaborating closely with the company’s coffee business, Zone EMENA and the UK market – where the new range is now on sale – experts at the Nestlé’s coffee research and development center in Orbe, Switzerland and Marysville, USA developed innovative approaches to roasting for this range, plus recipes and packaging – all within an eight-month timescale from idea to launch.

The experts worked tirelessly to perfect different roasting profiles for the Arabica and Robusta beans used in the two new blends, experimenting with roasting levels and roasting times. ‘The Light Roast’ has a smoother, more delicate taste, with notes of caramelised honey and toasted biscuit, while ‘The Dark Roast’ is bold and intense, with notes of dark chocolate and roasted nut.

The coffee beans are grown and produced in a sustainable way that benefits coffee farmers and the environment, and are packaged in aluminium tins that are 100% recyclable and plastic free – to support Nestlé’s 2025 packaging commitment.

Damien Tissot, head of Nestlé Product Technology Center Beverage in Orbe, said: “Nescafé Gold Blend Roastery Collection delivers amazing new taste profiles, due to an innovative roasting process that allows us to emphasize the natural taste of the different beans and use them in our blends, fitting the current trend towards specialty coffee. The plastic-free packaging is another proof of our commitment to delivering sustainable innovation for all Nestlé coffee brands.”

Don Howat, global category leader for Nescafé, said: “This is a great concept based on really strong consumer insight. The range was developed in record time and we’re excited to be launching in the UK, then quickly rolling out to other markets. Fantastic teamwork!”

Two additional soluble coffee innovations have also just launched in the UK. Nescafé Azera Craft Coffee, the UK’s first craft coffee in instant format, and Nescafé Azera My Way Latte, the market’s first instant latte that can be prepared using a choice of milk or plant-based milk alternatives.

Discover how Nestlé is ‘Raising the Bar in Coffee‘ across its entire portfolio, in this recent feature written by chief technology officer, Stefan Palzer. And find out how Nestlé is pioneering new lower-carbon coffee plant varieties for distribution to farmers.

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The Nescafé plant-based latte range in Japan includes ready-to-drink beverages to enjoy on-the-go or at home, soluble mixes that can be made by just adding hot water, and capsules for the popular Nescafé Dolce Gusto system.

The two varieties are oat latte and almond latte, both of which are blended with smooth Nescafé coffee.

The launch in Japan follows earlier launches of Nestlé plant-based coffee mixes across a number of countries in Europe, Latin America and Oceania.

Philipp Navratil, head of Beverages Strategic Business Unit, said “We are delighted to bring new coffee experiences with the launch of our Nescafé plant-based lattes in Japan. We are championing the discovery of plant-based food and beverages at Nestlé, and our iconic Nescafé brand is embracing and leading this trend.”

Nestlé is helping people embrace a more plant-based diet, with options across its wide range of food and beverages.

The company has already launched plant-based alternatives to dairy made from rice, oat, soy, coconut, pea and almonds across categories. Examples include non-dairy ice cream, coffee creamers, rice- and oat-based drinks, pea-based beverages, plant-based cappuccinos and lattes, a vegan condensed milk alternative, as well as a range of non-dairy cheese to complement its plant-based burgers.

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Building on the significant progress over the past decade (pdf, 4 Mb), Nestlé has now pledged to increase its sustainability efforts.

Philipp Navratil, senior vice president, head of Beverages Strategic Business Unit, said: “Together with our partners and 230 Nescafé agronomists, we improved efficiency and agricultural practices on farms, enabling farmers to command a premium price for coffee grown sustainably. We diversified sources of farmer income to reduce their dependence on monocultures and to make them more resilient. We will not stop here. Our programmes will evolve toward better social conditions in and around coffee farms. We will double down our efforts on labor rights, child protection, youth and women empowerment.”

By 2025, Nescafé expects to have 100% responsibly sourced coffee, tracing it back to an identified farmer group. The coffee is verified or certified by independent organisations.

Nescafé will reduce and remove carbon emissions where it sources coffee and throughout its operations. Nescafé says it will also use environmentally friendly packaging. These are steps that will help Nestlé reach its 2025 packaging commitment and its 2050 net-zero ambition.

Nescafé’s partner, Rainforest Alliance, evaluates activities in coffee-sourcing regions worldwide to ensure they positively impact farmers’ lives. Rainforest Alliance regularly monitors farmers’ adoption of good practices and the evolution of related indicators like productivity.

“Our partnership with Nestlé on the Nescafé Plan is about improving and optimising coffee farming. Working together with the Rainforest Alliance on training, monitoring and evaluation, Nescafé used data and evidence to adapt its activities with the coffee farmers. We are delighted to be their partner on this journey,” said Alex Morgan, chief markets officer, Rainforest Alliance.

Through implementing the Nescafé Plan since 2010, Nestlé has achieved the following:

• Currently, 75% of coffee for Nescafé products is responsibly sourced. In 2020, Nescafé purchased more than 649,000 metric tons of responsibly sourced coffee, the largest volume from a single coffee buyer;
• Distributed 235 million high-yielding and disease-resistant coffee plantlets, exceeding the initial objective of 220 million. This contributed to the renovation of nearly 120,000 hectares of coffee farms worldwide;
• Developed and released 15 new Arabica and Robusta coffee varieties in five countries: Mexico, Colombia, Ecuador, Philippines and Thailand. These plant materials have higher productivity, resiliency and superior quality;
• Delivered more than 900,000 farmer training sessions on good agricultural practices. The objectives were to optimise productivity and costs, improve quality and reduce the environmental footprint through efficient irrigation methods or pruning techniques;
• Empowered more than 10,000 women and young farmers through leadership programs and training on household economic planning;
• Reinforced the business skills of more than 10,000 farmers with a focus on financial literacy, record keeping and entrepreneurship.

Nestlé will publish a new and expanded Nescafé sustainability roadmap before the end of the year. The company says it will continue to work diligently to foster a more robust and sustainable coffee sector.

Download the report here: “Our sustainable journey – Ten years of the Nescafé Plan.”

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The Nescafé Gold lattes are reportedly the world’s first plant-based soluble coffees mixes and are available exclusively from Tesco until February 2020, after which they will also be available in other retailers across the UK.

This latest coffee innovation from Nestlé will help meet the growing consumer demand for plant-based and non-dairy in the UK.

Neil Stephens, head of the Nescafé business in the UK and Ireland, said: “Our new Nescafé Gold frothy coffees bring the plant-based latte trend out of the coffee shop and into the home. The three delicious flavours, oat, almond and coconut are vegan friendly.

“Nescafé is the world’s favourite coffee, but we do not take our position for granted. We are quick to spot and embrace fast moving coffee trends and tastes in this highly competitive and innovative market. Our new plant based vegan latte mixes are the latest in a long list of innovations to bring new and exciting sensory experiences to our loyal Nescafé consumers.”

The plant-based lattes are being launched first in the UK and Ireland before being rolled out in several markets across Asia, Europe, Latin America and Oceania.

The new vegan lattes will complement the existing range of 17 Nescafé Gold frothy coffees.

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