Despite its status as the world’s largest hot drinks manufacturer, Nestlé faces a tough battle for global dominance with Kraft in coffee due to the rising popularity of fresh coffee, according to BeverageDaily.com.
The report, cited Euromonitor International analyst Brian Morgan saying that Nestlé’s global value share within instant coffee was 51% in 2010. “Its dominance here is and will remain secure for some time to come,” he said.
And despite a trend towards ‘premiumisation’ within mature western European and US markets, which favoured fresh coffee sales, Morgan said emerging markets helped Nestlé consolidate its growth trend, with a 15% market share in 2010.
Overall, Nestlé instant coffee sales outpaced fresh from 2005-2010, Morgan said, due to emerging market demand that the firm had built upon by assuming a leading position within Asia Pacific and Eastern European markets.
But principal global rival Kraft posted its strongest performance within Russia over the same period, even beating Nestlé in terms of fresh coffee sales.
Morgan warned that as Russians “begin to trade up to fresh coffee, sales of which are expected to grow by USD$278 million over 2010-2015, Nestlé will face some pressure as this transition speeds up post-2015.
Other key findings: Despite a clear division between instant and fresh, fierce competition in markets such as France has seen Nestlé grow its Nespresso (fresh coffee system, capsules pictured) sales, while Kraft has pursued Carte Noire gains.
Within US, UK and Chinese instant coffee markets, Nestle also faced growing competition from Starbucks.
Starbucks is growing its presence in the US and UK supermarkets, has extensive sales network and has launched its Ready Brew brand.
More at Beverage Daily.com