Nestlé is betting big on India to grow its coffee business amidst fast-evolving coffee culture led by young consumers and growing interest in speciality coffee. India is one of the fastest-growing coffee markets for the Swiss packaged food major and is looking to convince more Indian consumers to drink coffee in a market that is still dominated by tea-drinkers.

Philipp Navratil, Head of Coffee Strategic Business Unit at Nestlé told businessline, “India is a very important market for us because of its sheer size and population offering huge headroom for growth with a low per capita consumption of coffee. We are also seeing a growing coffee culture driven by young consumers with new coffee shops coming up in the country.”

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Stating India is one of the fastest growing markets for Nestlé’s global coffee business, he added that Nescafé has already reached a household penetration of 46 million households in the country. “India is a sizable market already and household penetration is accelerating. We believe Nescafé is perfectly positioned to introduce coffee to new consumers as its offers great quality at accessible prices in terms of price per cup.,” Navratil said.

Positive outlook

“Our key focus is to grow the household penetration of our coffee portfolio further in India. We believe it’s not a matter of if but when and it will probably happen faster in the southern India region as they have a well-entrenched coffee-drinking habit. We are also sharply focusing on driving efficiencies in our supply chain to maintain the “magic price points” such as ₹2 or ₹10 as they are critical to make our products accessible to a broad population,” he added.

Asked about plans for future launches, he said, “Our strategy is to continue to grow our existing core portfolio. We also want to tap into the premiumisation opportunity in India as coffee consumption is getting more sophisticated, allowing us to bring innovations to India. We may look at launching products such as coffee concentrates and single origin coffees.”

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The company launched its sustainability initiative called Nescafé Plan in India in 2012. Over the last 10 years, Nestlé India has partnered with 3,500 coffee farmers in the country to source coffee. Navratil pointed out that Nestlé is sourcing coffee from Indian farmers to make its products not only for India but also for global production.

“We also see a huge opportunity to leverage India as a talent factory for our global coffee business,” he added.