Nestlé Eyes Starbucks Coffee Partnership in India
Nestle, which has a global coffee partnership with Starbucks to sell its consumer packaged goods in the retail channel, is evaluating opportunities to extend it to India. The beverage retail business of Nestle India crossed the ₹2,000 crore-mark in the 12 months period ended December led by brand Nescafe. The packaged food major is also introducing its super premium coffee portfolio under the brand Nespresso in the country. India is one of the fastest growing coffee markets for Nestle globally.
Under the global coffee alliance inked in 2018, the two companies sell a range a products. This includes Starbucks capsules for the Nespresso and Nescafé Dolce Gusto systems, whole bean, roast and ground and premium instant Starbucks coffees, K-Cup pods and creamers. It has been selling the products across 80 markets globally. It also sells a range of ready-to-drink coffee beverages in certain markets such as Southeast Asia under this partnership.
The global coffee partnership is focused only on selling packaged coffee products in retail and for in-home consumption and does not include coffee outlets.
In India, the Starbucks outlets are run under a joint-venture with Tata Consumer Products Ltd.
Nestle India has been steadily growing household penetration for brand Nescafe. The company said that the brand Nescafe has strengthened its leadership position and has brought 3.7 million households into the coffee category.
Axel Touzet, Head of Nestlé’s Coffee Strategic Business Unit said, “We see tremendous potential for growth of coffee in India. The more we make progress in terms of household penetration and more consumers acquire the coffee habit, the bigger the coffee business will become in the country.”
“Nestlé has a global coffee partnership with Starbucks that allows both companies to bring to market a wide range of products. We continue to evaluate similar opportunities to expand our coffee portfolio in India to target different coffee consumption moments as more and more people in India look to coffee as their favourite beverage.” he stated.
Meanwhile, Nestle India is introducing the Nespresso portfolio including coffee capsules, machines and accessories. It is also set to soon open the first Nespresso boutique in New Delhi and is planning to expand it into other major cities. “India is one of the fastest growing coffee markets for us. We have seen that affluent consumers have the appetite for the Nespresso portfolio. There is definitely a market for high-end coffee propositions in India and that is why we have decided to introduce the brand in India,” Touzet explained.
The coffee market in India is predicted to reach around $1.23 billion by 2032 fuelled by younger consumers who consider coffee drinking aspirational. Nestlé is one of the top buyers of coffee in India, with its annual purchase value at around 10 per cent of India’s total Robusta coffee output. It works closely with about 5000 farmers in Karnataka, Kerala and Tamil Nadu. As part of the Nescafe plan in India, the company trains coffee farmers on regenerative farming practices and helps them develop their agricultural practices in terms of quality, productivity and sustainability. It also supports them in obtaining 4C (Common Code for the Coffee Community) certification.
Source : Dairynews7x7 Feb 6th 2025 Hindu Businessline