Nescafe beats 2019 industry growth
Nestle Thai Ltd, the marketer of Nescafe coffee, has seen its instant coffee turn around for the first time in 2019 after weak sales for several years because of the popularity of coffee shops.
Naritta Vipulyasekha, the company's business manager for Nescafe coffee mixes, said sales of Nescafe instant coffee beat industry growth last year. She declined to mention precise figures.
According to Euromonitor, there were 8,025 coffee shops operating in Thailand in 2018, up 4.6% from 2017. Thailand's overall coffee market was estimated to be worth 36 billion baht.
Of the total coffee market, 21.1 billion baht belongs to instant coffee, 1.2 billion baht to the premium market and the rest to other segments.
A key player driving coffee consumption is All Cafe of CP All Plc.
Ms Naritta said Thailand's instant coffee market in 2019 grew by 2% from 2018.
"2019 was a golden year for Nescafe because our sales via all channels grew," she said. "Thailand saw demand return for instant coffee after a hiccup the past few years."
Ms Naritta attributed the success of Nescafe to the company's heavy marketing activities, innovative products and variety of flavours.
The launch of Nescafe Americano increased consumption of iced coffee at home, she said.
With a continuously growing health trend, the company also launched less-sugar and no-sugar instant coffee to cater to this group of consumers, along with marketing activities to stimulate coffee consumption at home.
By pursuing these strategies, Nescafe Thailand became last year the world's biggest instant coffee sales contributor to Nestle, overcoming Nestle in the Philippines and China.
"Over five years, we often expressed concerns about the impact of the widespread popularity of coffee shops, but now we are quite confident that there is still huge potential to grow our instant coffee business in Thailand," Ms Naritta said.
Per capita coffee consumption in Thailand is still low at about 300 cups per year, compared with 400 in Japan and 600 in the European market.
The company will allocate 200 million baht to kick off its "Interactive Chinese New Year Blessing Campaign" for Nescafe Blend & Brew to reach consumers through multiple touchpoints.
Nescafe Blend & Brew Interactive Art Station at Wat Mangkon MRT station, with its large-scale, colourful Chinese illustrations and many AR (augmented reality) hotspots, was successfully launched last August and has seen over 5 million visitors and more than 1 million engagements on social media.
The company will expand the Nescafe Blend & Brew interactive consumer experience to the next level this year with an experiential marketing strategy to tap coffee drinkers nationwide.
"We expect this campaign will strengthen Nescafe Blend & Brew's leadership in the coffee mixes market while reinforcing our position as the No.1 brand," Ms Naritta said.