Nestle puts B450 million into developing healthier coffee
Company targets gradual sugar drop
Nestle, the Swiss multinational food and drink firm, is set to spend 450 million baht on developing technology at its factory in Chachoengsao province to produce a new premium instant coffee as part of its regional strategy to focus more on quality and less on sugar, in keeping with consumers' changing behaviour.
Audrey Liow, chairwoman and chief executive of Nestle Indochina, said Nescafe Gold Crema is the company's first premium pure soluble coffee product developed to meet the preferences of discerning Thai coffee lovers.
"We are confident that the new products will become the most preferred choice for premium pure soluble coffee, while making Nescafe Gold more accessible to Thai consumers," Mrs Liow said.
Nescafe Gold Crema comes with an innovative design and was launched in Thailand at the same time as in Western Europe. This was to respond to the sharp growth of premium coffee in Thailand in the past 4-5 years.
"Premium coffee consumption in Japan and Russia accounts for about 50% of the total coffee markets there, and we hope the trend will continue in Thailand in the foreseeable future," Mrs Liow said.
Premium coffee in Thailand is valued at 1.2 billion baht, with a growth rate of 20-30% a year.
Nescafe controls a 42% market share in the Thai premium market.
Thailand's overall coffee market amounts to 18 billion baht a year.
Mrs Liow says coffee becomes unhealthy when too much sugar is added.
Of the total, some 14 billion baht is captured by 3-in-1 coffee, 4 billion baht by instant coffee and 12 billion baht by ready-to-drink coffee.
"Apart from the focus on premium coffee products, we aim to reduce the sugar quantity of Nescafe canned coffee by 1-2 grammes," Mrs Liow said. "If we decrease the sugar levels in one swoop, people will have difficulty adjusting to the taste because Thai consumers like sweet things.
"Black coffee on its own is very good. It contains a lot of antioxidants. The problem with coffee is that you add too much sugar and other things until it becomes unhealthy."
Some 95% of Thai consumers drink white coffee. But now the company sees increasing numbers of people drinking black coffee. Some 8-9% of consumers drink black coffee.
Mrs Liow said some Nescafe products already meet the government's sugar requirements. But others will need 1-2 years to be brought down to the sugar level that the government recommends.
"The company can reduce sugar and can do this from a manufacturing perspective as well," she said. "When you go out and drink, whether you go to a modern cafe or a hawker, the sugar level is very high. The government only taxes manufacturers like us, but it doesn't tax the cafes or the hawkers. Therefore, it's not so easy for the consumers to switch to low-sugar coffee. I think [the government] needs to educate cafes and hawkers as well."
According to Mrs Liow, 8% of Thais drink black coffee, compared with about 20% of people in Singapore.
The company will sell more Nescafe machines to boost black coffee consumption, she said.
Thailand is the third-largest Nescafe market out of 189 countries where Nestle is supplied, behind Britain and Japan.
In Thailand, yearly coffee consumption per capita is only 250 cups, compared with 400 cups in Japan and more than 400 cups in Britain.
In addition, the company will gear towards making its portfolio healthier in response to the trend towards better health.
Last year, 28 products were certified with the Healthy Choice logo from the Thai Food and Drug Administration, and the number will double within the next two years, Mrs Liow said.
"I think it's important to make products that have lower sugar levels and are healthier, but it's not so easy," she said. "If you remove the sugar too fast, Thai consumers may not like it."
Mrs Liow said the company needs to gradually reduce sugar intake but maintain flavour, because food and taste are very important in Thailand and in most parts of Asia.
"You need R&D and technology to improve the texture, because once you remove sugar sometimes the product tastes bland and diluted," she said. "Coffee can be watery, so technology can help a product in terms of texture and mouthfeel.
"Nutrition is not the sort of journey where you can change habits tomorrow. We have to do a lot of things in terms of improving nutrition and improving the quality of life through roadshows."