Nestle Gold Medal Freeze-dried Coffee, which has been consumed 13 billion cups a year globally, is a category creator that is running at a new pace in China

By orchioo Apr15,2023

In Nestle’s Greater China region, where sales exceeded 40 billion yuan last year, the iconic coffee business is running at a new pace, and freeze dried coffee provides “fuel” for this.
According to data, the category of freeze-dried coffee was pioneered by Nestle, which can consume an average of 400 cups per second globally. In the Chinese market, more and more consumers are resuming the rhythm of “C in the morning and A in the evening”. How does Nestle seize the opportunity to continue to expand its freeze-dried coffee business, and how does this long-standing category continue to win the growing coffee consumption market?
Next, let’s learn about it together.
1、 Historical inheritance,
What is freeze dried coffee?
According to information, freeze dried coffee is technically using a freeze drying technique, which involves roasting, grinding, and brewing coffee beans, and then placing the pure coffee liquid in an ultra-low temperature vacuum environment. The ice in the coffee liquid directly sublimates into a gaseous state, leaving only the freeze-dried powder.
Therefore, the raw material for freeze dried coffee is simple and pure coffee beans, without any additional additives. With the global consumption trend of food and beverage gradually turning to the pursuit of health and nature, freeze-dried technology has also been branded with the “high quality, high standard” imprint.
In addition, freeze-dried coffee can also bring unique experiences in the taste: coffee beans themselves have extremely rich aromatic factors, and under ultra-low temperatures, the nutritional substances of coffee are preserved, resulting in a higher concentration of coffee, which is more able to retain the mellow taste and fresh flavor of ground coffee without impurities.
Finally, in terms of dissolution rate, the coffee particles obtained by freeze drying are also more fluffy, the retained coffee substance is also more pure, and the dissolution rate is faster. Therefore, whether faced with hot water, cold water, or other liquids at different temperatures, freeze dried coffee can be directly and quickly dissolved.
These advantages of freeze-dried coffee cater to the drinking needs of fast-paced work scenes, and are also favored by more and more white-collar workers.
Many consumers may not know that Nestle Gold is actually the creator of the global freeze dried coffee category.
According to information, Nestle Gold developed freeze dried coffee in 1965 and obtained a patent for freeze dried coffee technology. Due to this groundbreaking invention, Nestle Gold Medal Freeze Dried Coffee was successfully landed on the moon with Apollo 11 in 1969, becoming the only freeze dried coffee brand that ever landed on the moon: Astronaut Armstrong returned to the spacecraft and enjoyed a cup of Nestle Freeze Dried Coffee.
But this food giant is not on the “merit book” of history. After creating this category, Nestle has repeatedly promoted the freeze dried coffee iteration. In particular, with its gold medal freeze-dried coffee series, it has significantly captured growth opportunities in the global coffee market and consolidated its leading position in the field of instant coffee.
According to Nielsen’s data, Nestle Gold has become the world’s top lyophilized coffee brand by sales, covering six continents worldwide, with an annual global consumption of 13 billion cups, equivalent to an average of 400 cups consumed per second.
What else did Nestle’s gold medal do right behind this transcript?
First, it is continuously improving its freeze-dried coffee technology. According to reports, Nestle Gold has the “three-dimensional aroma locking technology” to select high-quality coffee beans, customize the gold baking curve, accurately control the segmented temperature, in order to bake the best coffee aroma; At the same time, it is freeze-dried at a low temperature as low as – 50 ℃ to lock in the fresh taste.
To this end, with the support of the secondary aroma locking technology originated in Switzerland, Nestle Gold captures the aroma factors of freshly roasted coffee, extracts and seals them, and through secondary injection, fully restores them to each freeze-dried particle, in order to pursue a consumer experience that is instantly fragrant, more mellow in the mouth, and has a long aftertaste.
In addition, Nestle Gold has also crossed the coffee “race track” to challenge new heights in quality and taste. This is reflected in its dissatisfaction with benchmarking with other brands of instant or freeze-dried coffee, and its enterprising spirit allows consumers to conduct blind testing of gold medals and freshly ground coffee in coffee shops to test the taste and quality of products.
According to Nestle Gold, in the latest consumer survey organized this year, consumers drank Nestle Gold Coffee and a well-known chain coffee brand’s freshly ground coffee, and compared the taste of the coffee to a blind test score.
“The test results show that consumers’ preference for the taste of Nestle Gold Freeze Dried Coffee is better than that of freshly ground coffee, especially in terms of aroma and mellow thickness of coffee, which further confirms that the taste of Nestle Gold Freeze Dried Coffee is’ fragrant as freshly ground ‘,” said the brand.
2、 Chinese brand
Specifically, in the Chinese market, as the coffee market continues to expand, emerging brands emerge in endlessly. After more than 80 years of sedimentation, Nestle still maintains its position as the “leader” in the Chinese instant coffee market and has become an important “player” in the high-end freeze-dried coffee market. How does Nestle’s gold medal capture the minds of consumers among them?
First, build a product matrix. Currently, Nestle Gold Freeze Dried Coffee has four major product lines in China, namely, freeze dried coffee imported from Japan, freeze dried coffee imported from Switzerland, freeze dried coffee in individual strips, and fiber freeze dried coffee with health functional ingredients. The distinct selling points of these products have attracted different coffee consumer groups to drink in various scenarios.
Second, create core products: freeze dried coffee imported from Japan. When it comes to selecting core products, the brand points out that this is based on both flavor and price considerations.
From the perspective of flavor, the imported freeze-dried coffee from Japan is roasted at a slow Japanese heat, which allows the Maillard reaction of the coffee beans to be more sufficient. The roasted coffee has a smooth taste, moderate bitterness, and a rich aroma, which is more suitable for the taste of Asians. From the perspective of price, a single bottle of 80g freeze-dried coffee imported from Japan costs around 56 yuan, and the single cup price (calculated as 2g/cup) is more than 1 yuan. It has a high cost performance ratio and is more suitable for migrant workers to drink as ration coffee.
According to Nestle data, Nestle Gold imported freeze-dried coffee from Japan has entered China for less than two years, and has quickly become one of the top brands of Nestle coffee.
Third, lead the consumption wave and consolidate product leadership. How to lead the wave in coffee consumption? Nestle believes that high-end, personalized, and accessible coffee will be important elements for consumers to choose home coffee.
Based on this, the relevant person in charge of Nestle Gold said that they would continue to lead high-end expansion and assume an important role in upgrading brand consumption.
Nestle Gold has also grasped the trend of health in recent years, rapidly enriching product dimensions, such as the launch of freeze-dried coffee imported from Japan in 2021, the launch of fiber freeze-dried coffee with health benefits, and new black coffee products such as bag brewed and ground coffee in 2022.
3、 Plan the future
After the optimization of prevention and control measures last year, the coffee consumption market has recovered rapidly as life and work have recovered regularly. Although the surge in the number of physical coffee shops has provided consumers with a variety of convenient options for drinking instant coffee, instant coffee still firmly occupies a place in the coffee category.
According to the “2018-2023 China Coffee Market Outlook and Investment Opportunities Research Report” released by the China Commercial Industry Research Institute, the market share of instant coffee in China is as high as 72%, while the market share of freshly ground coffee is 18%.
So, what are the trends in consumption of instant coffee? On the one hand, with the continuous improvement of public health awareness, more and more consumers are gradually willing to choose healthy products in the consumption of coffee. Against this background, the category of black coffee is becoming increasingly popular.
According to Nielsen’s research, combined with offline and online channels, in the Chinese solid coffee market, the sales of black coffee exceeded that of mixed coffee in 2021, with a year-on-year increase of 59%, and the market share of sales jumped to 52%; Just a year ago, the market share of black coffee sales was only 40%, lower than the 60% of mixed coffee sales.
This consumption trend has benefited freeze-dried coffee. According to a report by Nielsen in 2022, freeze-dried coffee is the fastest growing category of black instant coffee products, with a market growth rate of 34% and a market share of 64%. It is also the largest track in the market.
On the other hand, as the coffee market matures and consumer demand continues to expand, more and more players are joining the coffee field, expanding the segment of the track. The fierce competition and consumption upgrading are both driving the upgrading and high-end transformation of instant coffee products.
From the only freeze-dried coffee that entered China in 2003, Nestle Gold Coffee has also expanded its collection of coffee, ear coffee, and other products, spanning multiple tracks, to help brands increase scene penetration.
However, it is certain that freeze-dried coffee is still the pillar core business of Nestle Gold Coffee, and it is also a track for continued efforts to maintain high growth in the future: Nestle Gold’s freeze-dried coffee line is in line with the expectations of the Chinese market for health and high-end.
According to Nestle Gold, the compound annual growth rate of its business has “continued to lead the growth of Nestle’s Chinese coffee business” in the past five years since 2018. According to the “Big Data Monitoring Report on the Development and Consumption Demand of China’s Coffee Industry from 2022 to 2023” released by iMedia Consulting, the size of China’s coffee market in 2022 was about 485.6 billion yuan, and it is expected that the coffee industry will maintain an annual growth rate of 27.2%, and the market size may exceed trillion yuan in 2025.
It is certain that in the future, Nestle will also make good use of the “big players” of the coffee family, continue to deepen the layout of the Chinese coffee industry, in order to consolidate its market position. It is reported that in the future, Nestle Gold will also conduct more thorough online and offline communication and channel layout for urban white-collar workers, using more diverse products to enhance consumers’ high-end experience, with a view to creating a higher brand and product penetration.
Providing a distinctive product matrix based on consumers’ different preferences for flavor, function, and experience is the secret of Nestle Coffee’s enduring success in the coffee industry for decades; The continuous construction of Chinese coffee culture and the upgrading of coffee consumption cannot be separated from the continuous participation and promotion of classic models such as the Nestle Gold Medal.

By orchioo

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