Issue link: https://read.dmtmag.com/i/491365
STiR tea & coffee industry international 55 Euromonitor reports that it is now the fourth-largest market worldwide for RTD coffee for volume and number five for value. This desire for convenience coffee makes soluble coffee sellers anxious to share their product with Chinese customers. Nestlé has been placing significant effort in the Chinese market, developing a program of more than 2,000 farms grow- ing coffee in the Yunnan Province. The company purchases one-fifth of the yield of the crops grown. In doing so, Nestlé has developed a new import market, but has also introduced many potential customers in this tea focused region to the taste of coffee. It is not surprising that Nescafé currently accounts for 50% of all RTD in China, as well as 74% of the instant market. Given that Euromonitor projects a volume increase of 129% by 2017, no one is turning away. Other soluble coffee vendors are ready to try to take a bite out of that, both in China and across Asia. Asians Prefer Premium Instant By Dan Bolton Instant coffee in Asia's developing markets is viewed as a luxury product with sales growing much faster than in Europe or the US. Accustomed to the convenience of coffee sticks and 3-in-1 packs, Asians of all ages are developing a taste for premium instant. In response manufacturers are offering Fair Trade Certified, organic, and Rainforest Alli- ance instant in developed soluble coffee markets such as Korea and Japan. Decaf is also showing gains with the greatest demand among middle- aged women with health concerns. Aging coffee drinkers everywhere seek to avoid uncomfortable heartburn, broken sleep. Soluble coffee holds the greatest off-trade market share in every developing Asian country. In South Ko- rea instant accounts for 94% of coffee market value. Japan is the global leader in instant coffee sales. Nestle is the market leader in Japan with an off- trade value share of 32%, according to London-based market research firm Euromonitor. Instant was first pro- duced in Japan in 1966 in Himeji. There are now two soluble factories in operation. Nescafe's Barista machine for at home instant was developed exclusively for Japan. "The Barista system, cappuccinos and specialty coffees embody the rejuve- nation of the Nescafé brand, delivering a great fresh, instant coffee experience," according to Nestlé S.A. In China and Japan the introduction of Starbucks Via in 2011 has drawn the attenion of young coffee drinkers who frequent cafes. Nescafe, in contrast, is sold largely at supermarkets, vending, and restaurants. Nestlé is actively launching new flavors and trading up to the mid- and high-end market. In China Nestle has penetrated deep into the rural market where it enjoys "very high awareness" selling coffee packets for 15-cents, according to Euromonitor which estimates the market for instant at $800 million. "Nescafé Guancang premium series offers four fla- vors: white coffee, mocha, cappuccino and latte, which are packed in sophisticated-looking folding cartons and sold at RMB3/unit, which is double the price of classic 3-in-1 coffee sold at RMB1.5/unit, writes Euromonitor in its Coffee In China (May 2014) report. Nescafe's share of the global instant coffee market was 44.3% in 2013. Mondelez International, which is merging with DE Master Blenders 1753, will rank sec- ond. Globally the Nescafe brand generates $13.5 billion a year in instant coffee sales, 59% of parent company Nestle's coffee category revenue and 20% of the com- pany's operating profit according to a report in the Wall Street Journal. Nescafe's Barista machine for at home instant. Photo copyright NESTLE S.A./NESTEC S.A