Nestle, Saturnbird brew summer stimulation

Refresh of Nescafe 1+2, gift boxes, new consumption scenarios redefine the coffee market in China

Packaged coffee brands in China are turning on 2021 summer heat with new offerings, innovative promotions and novel marketing strategies.

For instance, Swiss food and beverage giant Nestle's Nescafe 1+2 instant coffee brand, which was among the first coffee products to win Chinese hearts and tastebuds, has introduced two novelties in the country to target a new generation of Chinese consumers.

The first new variety uses recycled packaging; the other one is made with double-sized beans. Nescafe 1+2, which accounts for more than half of the instant coffee sector, has "Awaken your bold "as its new slogan.

The brand refresh is also part of Nescafe's efforts to support the high-quality, sustainable development of the local coffee industry.

That goal has become strategic as China now represents the world's largest coffee market. According to the Prospective Industry Research Institute, the Chinese coffee market is expected to grow by an average compound annual growth rate of 10 percent from this year to 2026.

As a category, instant varieties have the highest share of the coffee market, and the younger generation is now the main consumer group, said the report.

According to Euromonitor International, instant coffee's market value has grown from 11.2 billion yuan ($1.75 billion) in 2018 to 12.6 billion yuan in 2020.

Nestle figures among the top players, but its market share has declined from 72.4 percent in 2018 to 71 percent in 2020. In China, Nestle's market value is followed by Saturnbird of Changsha Saturnbird Coffee Co Ltd, (up from 0.1 percent to 3.7 percent) and Maxwell House of JDE Peet's BV (1.2 percent).

Adrian Ho, senior vice-president of Nestle's coffee business in China, said: "Nescafe has always been the engine of Nestle's business growth. We are very pleased to participate in and witness the evolution of Chinese coffee culture and the upgrading of Chinese coffee consumption."

Zhu Danpeng, a food and beverage analyst, said: "It is a good time for Nescafe 1+2 to innovate and upgrade its brand image and products to meet changing demands from consumers. The coffee sector is soaring, highly diversified and segmented, which requires coffee brands to come up with plans targeted for each consumption scenario and consumer group."

According to Nestle's first-quarter sales report for 2021, coffee was the largest contributor to its growth globally, fueled by strong demand for Nespresso, Nescafe and Starbucks products.

In the Chinese market, coffee, culinary, dairy and confectionery all grew at double-digit rates, said Nestle's report.

Nescafe 1+2 has joined forces with the popular rock band Spring is Coming, paying tribute to the younger generation with live house performances and encouraging them to be bolder and pursue richer life experiences.

The relaunch of Nescafe 1+2 demonstrates Nestle's determination to form a stronger emotional connect with young consumers. Its higher quality coffee is achieved through two kinds of coffee beans, which produce stronger and smoother taste, the local unit of the Swiss company said.

As the new generation of consumers show more interest in environment and green causes, Nestle has promised to ensure 100 percent of its packaging will be done using recyclable or reusable material by 2025. It will also cut use of virgin plastic in packaging by a third.

Nestle has also launched the "Cup of Respect" sustainable development concept, revolving around environmentally friendly packaging, carbon neutrality and the healthy development of the whole industry.

In the future, the refreshed version of Nescafe 1+2 will upgrade product packaging (except for certain products like detachable sachets strung together) to 100 percent recyclable materials, leading the way for instant coffee products to adopt recyclable packaging solutions in China.

For Nestle, this packaging upgrade will help reduce the negative impact of plastics on the environment and forms a crucial part of Nestle's packaging evolution.

Focused on achieving the sustainable development of the entire coffee supply chain, particularly in terms of safeguarding the rights and interests of coffee farmers in economically underdeveloped regions, the "Nescafe Plan" has been running for a decade now, with an investment of about 2.5 billion yuan, aimed at improving the living standards of coffee farmers and their overall well-being.

Following this upgrade, Nescafe 1+2 will only use coffee beans with 100 percent satisfaction and sustainable procurement standards, working from a new aspect to help realize the goal of sustainable development.

For domestic instant coffee brand Saturnbird Coffee, the way to step into the summer－a peak season for its cold-brew instant coffee product－is to get more involved with trendy lifestyles of the Gen Z consumers.

Saturnbird has unveiled its summer campaign "Project &" recently, offering gift boxes by collaborating with renowned lifestyle-related intellectual property (IP) owners, to recreate interesting life scenarios, from outdoor biking and camping to urban markets.

Saturnbird has worked with ABC Camping, an outdoor facility provider, to offer coffee consuming appliances that integrate coffee drinking seamlessly with outdoor activities.

For people who are athletic and love to keep fit, the domestic instant coffee brand has allied with Keep, the emerging sports-and-lifestyle brand, to deliver instant coffee products and workout facilities for exercise scenarios.

Meanwhile, Saturnbird Coffee's reward program "Project Return" has exceeded the total of the previous three times for the fourth time, in terms of the number of reservations, number of products converted and number of containers recycled.

Consumers of Saturnbird Coffee are eligible to redeem items from the instant coffee maker at its Project Return season twice a year. Between May 14 and 16, the company prepared products in 26 categories for its consumers and offered them at 168 coffee shops in 52 cities. The project has connected more than 90 percent of its consumers in the country, said Saturnbird.