In a strategic review last summer, Nestlé announced plans to focus on faster-growing business areas such as coffee and healthcare.
Commitment to this strategy was first shown earlier this year, when the company acquired Canadian vitamin-maker Atrium Innovations, and divested its US chocolate and confectionery business to Ferrero for $2.8 billion.
Now, the consumer goods giant is bringing its focus to the coffee category, with the announcement that it is relaunching its classic instant coffee brand Nescafé Gold.
The product has been 'completely reinvented', according to Nestlé, with a new formulation, packaging, and marketing campaign. The new range includes a Fairtrade organic version, as well as a decaff option, a 'barista style' blend, and coffees with varying levels of intensity.
"After 80 years touching people’s lives every day, we continue to share our passion and craft for making great coffee," said Carsten Fredholm, head of Nestlé's beverage strategic business unit.
"The relaunch of Nescafé Gold underlines Nestlé’s commitment to developing the coffee business and our leading brands around the world."
The new Nescafé Gold range has already been launched in the UK, and is now set to be rolled-out across European and global markets.
Premiumisation
In describing the new Nescafé Gold blend, Nestlé says that additional care has been taken to 'ensure a premium coffee experience in every cup'.
The idea of premiumisation is a recurring topic in Nestlé's new strategy.
The world's biggest food company hasn't reported a full-year loss since 1922, but posted relatively lukewarm 2017 results last month. Sales rose by 0.4% to CHF 8.53 billion, however, net profit fell to CHF 7.18 billion - a drop of 16% compared to the previous year.
With slowing sales, the company is now looking to premium products, such as Nespresso coffee and Les Recettes De L'Atelier chocolate, which currently account for 21% of the group’s sales, up from 16% in 2014 and 11% in 2012.
“Premium products are important because they generate growth, and they contribute to margin improvement," Francois Xavier-Roger, Nestlé’s chief financial officer, said after last month's results.
"We have a margin with premium products which is on average around 300 basis points better than the average of our products.”
Nestlé has been constantly expanding its premium coffee pod ranges, Nespresso and Dolce Gusto, and adding new on-trend products such as Chameleon Cold-Brew, but now this investment is spreading throughout its existing coffee portfolio.
Although Nescafé Gold remains a relatively low-priced instant coffee brand, its new makeover suggests that the company is trying to create a more premium image, with the aim of stirring up business in 2018.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.
