Nestle starts fresh coffee offerings
Nestle Thai Ltd, the marketer of Nescafe coffee, has branched out its business into out-of-home coffee to extend its sales opportunities.
Vladislav Andreev, the company's executive officer for coffee and creamer business, said Nestle opened the first Nescafe Hub at BTS Chidlom a couple of weeks ago.
"It is the first time Nescafe is offering fresh roast and ground coffee to Thais," said Mr Andreev.
Thailand's total coffee market was valued at 64.7 billion baht in 2017, a 4% increase from 2016. Nescafe coffee is the market leader in Thailand, controlling a 50% market share.
Of the total coffee market, out-of-home coffee is worth 26.7 billion baht and the remaining 38 billion baht is from at-home consumption.
The out-of-home coffee market has evolved rapidly over the past few years, with 8% growth in 2017. Of the total out-of-home consumption, speciality coffee shops and cafes are highly popular with Thai consumers, with a market value of 17 billion baht and average growth of 15.7% per year.
He said coffee sales at Thailand's transit hubs (skytrain, subway, airport, bus terminal and railway stations) account for over 1 billion baht per year.
Most Thai consumers want a premium, indulgent, and pleasurable coffee experience, with artisan sophistication that is natural and authentic, even when they are on the go.
"As the world's coffee expert, we know what today's sophisticated coffee lovers desire, which is why we are offering a fresh coffee experience for the first time at Nescafe Hub at BTS Chidlom. This reflects our business development vision of driving Nescafe to be the solution brand, offering an innovative coffee experience for both at-home and out-of-home occasions," he said.
Mr Andreev said the company believes that Nescafe Hub at BTS Chidlom will reach 15,000 commuters daily, with a sales target of over 300 cups per day for Nescafe Hub.
"There is a huge opportunity to grow the coffee market in Thailand both in homes and out-of-home. The per capita consumption of coffee in Thailand is relatively small at about 300 cups per year, compared to 400 cups in Japan and 600 cups in western nations," he said.
Suphavat Khamijoun, business development manager for Nestle Thai's coffee and creamer business, said that Nescafe Hub at BTS Chidlom is the first fresh coffee experience for the company in Thailand, with design and decor inspired by the flagship Nescafe store in Tokyo's Harajuku district.
The new cafe is aimed at office workers, shoppers, diners, tourists, expats, students and parents with 100% imported medium-roast Colombian Arabica beans priced at 65 baht for signature menu items and 45 baht for hot drinks.
Nescafe has been offering out-of-home coffee worldwide through several models for years.
But in Asia, Nescafe's out-of-home options were first offered in Japan and developed into various store formats over eight years.
The first flagship store opened in Harajuku district two years ago, with 50 Nescafe cafes available in Japan last year.
In addition to Japan, Nestle has expanded its out-of-home coffee in South Korea and Malaysia at the university.