Nestle unveils fruity instant coffee in China

Nestle has launched a series of new instant coffee products, which are infused with fruit flavor and can be brewed with ice or sparkling water for a more refreshing taste in the summer.

It marks the first time that the 80-year-old coffee producer Nescafé has launched crossover products in fruit flavors.

The move is an attempt by Nestle to attract young consumers with a more affordable yet unconventional coffee-drinking experience

The innovative products, dubbed Fruity Ice Coffee, have recently been launched on Tmall. Each single serving packet is priced less than 2 yuan ($0.28), designed to make the product more affordable and appealing to consumers mainly aged 15 to 30.

It took six months for Nestle's local team in China to design and develop the products. The bright, summery package design highlighting its three flavors -- peach, pineapple and green apple -- is different from the company's traditional instant coffee products.

The food- and beverage-maker has also invited online influencers to demonstrate how they create a variety of drinking experiences by mixing the product with sparkling water, ice or milk.

Wang Zhendong, chairman of the consultancy firm Shanghai Feiyue Investment Management, a company that specializes in the coffee industry, said Nestle has to keep innovating to strengthen its market dominance in China as it has recently been challenged by Southeast Asian instant coffee producers.

"Fruit-flavored coffee is the latest trend, but how to apply this trend to a more convenient consumption scenario is key in product development, as ice is not widely available at campuses, offices or homes in China."

Altug Guven, senior vice-president for Nestlé's coffee business in China, considers China a coffee consumption market with great potential.

Coffee consumption penetration has reached 50 percent among other beverages, but at a lower frequency, according to Nestle. Instant coffee tops all other coffee consumption at a penetration rate of 30 percent.

Guven said the Nescafé business in China is developing very fast. In 2018, the sector maintained double-digit growth, while some categories maintained high double-digit growth.

Faced with the rapid development of the Chinese market, brands must constantly change and innovate in order to cater to more consumer preferences.

"Young consumers like fresh taste and consumption experiences," said Guven. "So this series is aimed at matching coffee with the most fashionable taste elements at present to create a rich and wonderful multitaste experience."

Nestle said surveys show that taste is the most important driving force for consumers in choosing coffee products on e-commerce platforms.

According to e-commerce sales data in 2018, the annual sales volume of multiflavor coffee products grew rapidly, with an increase of nearly 70 percent, while young Chinese consumers preferred to try fresh and unique flavors.

Nescafé will introduce other unconventional flavors that suit local tastes in the winter.

The Nestlé Global Financial Report 2018 showed that growth was mainly attributed to innovations in infant nutrition, coffee and culinary businesses, as well as e-commerce. The coffee business is also playing an increasingly important role in growth.