Nestle rolls out touchless coffee machines

Zurich

NESTLE SA is preparing for post-pandemic coffee growth as the world's largest food company rolls out touchless machines for the office and bets new flavours that will win over more consumers making coffee at home.

The maker of Nespresso and Nescafe is planning a wider introduction of machines that can be controlled via smartphone, catering to concern about viral transmission, David Rennie, head of Nestle's coffee brands, said in an interview.

Coffee was one of the motors of Nestle's sales growth last year and makes up the bulk of the company's US$24 billion beverage business. Following a lukewarm introduction of Nespresso in the late 2000s, Nestle has made some bolder steps to boost its US coffee business in recent years.

The company splurged US$7.15 billion on a partnership with Starbucks in 2018, and now Nestle makes the coffee chain's products for at-home use worldwide.

That was a boom during the pandemic, when consumers were more likely to use Starbucks capsules in a Nespresso machine than take a walk to a cafe.

As vaccination drives bring the prospect of post-pandemic life in view, Nestle is eyeing opportunities to expand in offices while trying to keep stoking at-home demand with new capsules and types of soluble coffee.

"As people return to offices, they may not be going back in the same numbers as pre-Covid," Mr Rennie said by phone. "In-home consumption will continue to grow."

Mr Rennie said he sees big growth prospects in China, where average consumption of java is at just seven cups per person a year. Nestle opened almost 900 Starbucks counter locations in China last year as the country recovered from lockdowns faster than other countries. India and Africa are also priority markets for expansion, he said.

Contactless coffee machines are being rolled out globally, with introductions in Russia and China in coming weeks. The US overtook France as Nespresso's biggest market last year, and Mr Rennie considers there's still room for growth there as capsules and soluble coffee become increasingly in vogue.

Cold and flavoured coffee will be a focus there in 2021, with iced tropical coconut coffee and other flavours being introduced. "The good thing about the US market is that it's very big," said Mr Rennie, who was promoted to Nestle's executive board this month. "We're still a relative newcomer there." BLOOMBERG