Ready to drink into Nescafe's "recruiting new" magic weapon!

In the coffee landscape of Nestlé China, the role of ready-to-drink coffee is becoming more and more important.

"We started to do the ready-to-drink coffee business (Nestlé China's) about 12 years ago, and now China should be the largest market for Nestlé's ready-to-drink coffee business in the world.
" He Wenlong, senior vice president of Nestlé's coffee business in Greater China, told Xiaoshidai today.
This is somewhat surprising, because although the growth rate is good and the number of people is large, China is still not a big coffee consumer compared to the mature coffee market.

He Wenlong also pointed out that in the past, Nestlé China relied solely on instant coffee to start consumers' "first cup of coffee".
Now, ready-to-drink coffee has also become an important magic weapon for driving consumers to enter the coffee market.

"In the future, we will launch this'first cup of coffee' through different categories, different forms, and different channels to recruit more new coffee consumers.
" He said.

He Wenlong, Senior Vice President of Coffee Business of Nestlé Greater China, at the new ready-to-drink coffee communication meeting held today

Today, the coffee giant announced the launch of a new ready-to-drink product: Nescafe's ready-to-drink silky latte series, the new flavor "Spring Limited Sakura Souffle Latte", which will be launched in March 2021.
Xiaoshidai learned that Nestlé recently established a product innovation center focusing on liquid beverages and dairy products in Laixi, Qingdao.
This is one of the first new products developed and launched.

At the new product communication meeting held today, He Wenlong, senior vice president of Nestlé's coffee business in Greater China, and Peng Zhixin, head of Nestlé's ready-to-drink coffee business in Greater China, had a detailed exchange with the snacks and others, and also talked about the "first cup of coffee" New user recruitment strategies, product innovation ideas, distribution cooperation with Yinlu and channel layout, etc.

Next, the snack generation will take everyone to understand it.

"First Cup of Coffee"

"For us, the biggest strategic role of ready-to-drink coffee is to recruit new (coffee) users.
" He Wenlong told Xiaoshidai that many consumers also started contacting coffee with Nescafe ready-to-drink products and gradually cultivated them.
Its habit of drinking coffee.
"I think ready-to-drink coffee is a very important strategic part of the entire coffee journey.
"

He believes that ready-to-drink coffee is very suitable as an entry-level product.
"First, it is often a (flavored) drink.
Many products are not pure black coffee, which will be better accepted by many consumers who drink coffee for the first time.
Second, it is very portable.
Third, its price is relatively reasonable.
Easy to accept.
This provides consumers with a relatively low threshold to become a coffee beverage user.

Nescafe ready-to-drink series silky latte new product: Spring limited cherry blossom souffle latte

Taking the silky latte of the Nescafe ready-to-drink series as an example, he said that this product does not have a strong sense of bitterness in the taste of coffee, and it is very suitable for recruiting new drinkers.
Therefore, He Wenlong described that the role played by ready-to-drink coffee is "the first cup of coffee", and it is also the first step for Nestlé to start the coffee culture.
"We will not limit investment here.
"

Later, Peng Zhixin added that ready-to-drink coffee will be placed next to all other beverages, which will also help recruit beverage consumers to become new coffee drinkers.
"Originally, the consumer wanted to drink a Coke today, but seeing the new ready-to-drink coffee product next to him, he might be willing to try it.
" He said.

Xiaoshidai learned from Nestlé China that, at present, instant coffee and ready-to-drink coffee account for the same proportion of the company's overall coffee business, "the contribution is relatively even.
"

In recent years, China's ready-to-drink coffee market has also been heating up.
According to Euromonitor International's data, the domestic ready-to-drink coffee market is expected to exceed 14.
9 billion yuan in 2021.
In this market segment, Nestlé currently has a leading edge.
According to Nielsen's offline survey data, Nestlé's ready-to-drink coffee has a market share of more than 50%.

Nescafe ready-to-drink series silky latte

However, last year, due to the impact of the epidemic on channels outside the home, the business of Nescafe's ready-to-drink products was also affected in the short term.

"Our school access is particularly important.
Many schools did not open in the first half of the year.
In addition, the convenience store channel is also affected.
But most consumers will shop online, so our e-commerce sector has developed particularly fast.
" He Wenlong told In the second half of last year, the ready-to-drink business "recovered quickly.
"

Taste and experience

If classic flavors such as latte are suitable for "recruiting new", then the new flavors launched this time are more of a "freshness" for existing consumers.

According to reports, this new spring product combines "cherry blossoms and Soufflé dessert flavors" in taste innovation.
"As a key sales season for ready-to-drink coffee, each spring Nescafe Silky Latte series will create different flavors and bring consumers a fresh experience.
" Nestlé said that last spring, Nescafe Silky Latte was launched "Sakura plum flavor.
"

When talking about how to capture consumer taste trends, He Wenlong said that in addition to consumer research and blind testing, Nescafe will also draw inspiration from social media, other businesses such as the explosive flavors of candy and chocolate, and overseas trends.
For example, many consumers like to pair desserts with coffee, which inspired Nescafe to add the flavor of "Suffrei" desserts to their new products this time.

Xiaoshidai noticed that Nestlé recently established a product innovation center "focusing on liquid beverages and dairy products" in Lacey, Qingdao.
The Sakura Souffle Latte is one of its first new products developed and launched.

"We used to have an innovation center in Xiamen Yinlu, focusing on the R&D of ready-to-drink coffee, Yinlu peanut milk and Nestlé ready-to-drink tea.
Because (last year) we had some adjustments in our business with Yinlu and entered a new cooperation.
Model, so we adjusted the innovation of ready-to-drink coffee to Qingdao.
" Peng Zhixin told Xiaoshidai.

He added that this product innovation center in Qingdao will cover all of Nestlé's liquid beverages, for example, in addition to ready-to-drink coffee, it also includes professional catering solutions for liquid beverages.

Sakura Souffle Latte Artist Co-branded Sakura Peripheral Objects

It is worth noting that in addition to taste, Nescafe's ready-to-drink product innovation has begun to pay more and more attention to "derivative experience".

For example, in order to create the "ambience" of spring cherry blossoms and bring social topics, this new product also cooperated with the Japan Illustration Association gold award artist Kiuchi Tatsuro, including designing a "beautiful and appealing" product appearance and creating an artist Co-branded the cherry blossom series limited peripheral gifts, and created the cherry blossom season interior design in subways and supermarkets.

Cooperation with Yinlu

In terms of selling ready-to-drink, the coffee giant believes that its biggest opportunity now lies in distribution.

"Ac Nielsen data shows that there are 6 million retail outlets in mainland China, and we are only covering a part of the stores.
Therefore, how to open up new markets on the channel, I think this is our biggest challenge, and we need to continue to work hard.
A part of it.
" He Wenlong said.

Currently, Nescafe's ready-to-drink products are mainly distributed by Yinlu.

"Before Nestlé acquired Yinlu many years ago, the two parties were already partners, and now we are still close partners.
" He Wenlong told Xiaoshidai, first, Yinlu continues to produce Nestlé's ready-to-drink coffee; second, Yinlu distributes Nestlé's ready-to-drink coffee in 12 provinces.

Xiaoshidai introduced that in November last year, Nestlé Group announced the sale of Yinlu peanut milk and Yinlu canned eight-treasure porridge business in China.
The transaction included all of Yinlu Food Group's five companies located in Fujian, Anhui, Hubei, Shandong and Sichuan.
Equity.
At the same time, as part of the transaction, Yinlu will continue to process and produce Nescafe ready-to-drink coffee products for Nescafe, and distribute them in most regions of Greater China.

In He Wenlong's view, expanding offline channels is still a top priority.
"Of course the entire retail industry is also changing.
We are also observing this.
But back to the source of the problem.
If we want to cultivate coffee consumption culture and habits, we still have to experience it through physical experience.
We need to let consumers try and drink.
Then I like our products and brands.
" He said.

In subsequent exchanges with Snack Foods, Peng Zhixin added that in terms of distributing goods, the penetration rate of Nescafe ready-to-drink products in hypermarkets and supermarkets is relatively high.
"But the traditional small store with the most (number) in China is ours.
Something that needs to be strengthened.
"

At the same time, the coffee company is also adapting to new channel changes.

"Affected by the epidemic, we have seen some changes in the channels.
Because consumers are going out less, there may be fewer dining out, less travel, less driving to high-speed stations, etc.
These behavior changes make everyone's consumption We are shifting more from outdoor channels to O2O and e-commerce channels.
Therefore, we have increased investment in O2O and e-commerce.
" Peng Zhixin said that channel expansion is a long-term focus of Nestlé coffee ready-to-drink products in the future.

Source: Snacks Generation

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