Sensing a great business opportunity in the Chinese market where, the food giant Nestle claims, the consumption per capita of coffee is still lower than global standards, the company has started to sell its Starbucks branded coffee in mainland China.
Last year, the exclusive right for the sale and marketing of coffees and teas globally was bought by Nestle for $7.15 billion from the United States coffee chain. Starbucks. Sale of products of Starbucks was started by Nestle in February this year itself in Europe, Asia and Latin America.
Chinese e-commerce platforms such as Alibaba’s Tmall and JD.com have been chosen by Nestle, the largest food company of the world, for selling of 21 of Starbucks’ capsule and instant coffee products. The company also said that it would also sell the products to offices and hotels in tier-1 cities.
“We believe China is the most exciting market in general but especially for coffee because... per capita cup consumption is quite low as compared to Asia,” said Rashid Aleem Qureshi, Nestle’s chief executive officer for the Greater China region.
“Right now the overall soluble coffee in China is growing between 3-5% (a year) and we believe that by bringing this exciting new business opportunity we should be able to grow faster than that,” he said while talking about a category that comprises of capsule and instant coffee.
The growth of the Swiss company in the first half of the current year was slower than normal in China – which is its second largest market. The company has said that the sale of other categories such as mainstream baby foods have been under pressure compared to the pricier products offered by the company in China.
The business opportunity for coffee in China, according to Nestle is immense because compared to the per capita coffee consumption of about 400 a year in Japan and 300 in South Korea, it is just about 6 cups a year.
Currently, Nestle sells a wide range of coffee products already in China which includes Nescafe instant coffee range and Nespresso capsule coffees and Qureshi believes that the company would now have the added option of offering a premium coffee option to that range of products by the partnership with Starbucks.
Two new avenues for selling of its products in China has been opened by the partnership between Nestle and Starbucks, said Belinda Wong, CEO of Starbucks China. He said that his company has been making heavy investments in China for development of its store network and delivery even in the face of increased tough competition from some local brands and startups.
(Source:www.nytimes.com)
Last year, the exclusive right for the sale and marketing of coffees and teas globally was bought by Nestle for $7.15 billion from the United States coffee chain. Starbucks. Sale of products of Starbucks was started by Nestle in February this year itself in Europe, Asia and Latin America.
Chinese e-commerce platforms such as Alibaba’s Tmall and JD.com have been chosen by Nestle, the largest food company of the world, for selling of 21 of Starbucks’ capsule and instant coffee products. The company also said that it would also sell the products to offices and hotels in tier-1 cities.
“We believe China is the most exciting market in general but especially for coffee because... per capita cup consumption is quite low as compared to Asia,” said Rashid Aleem Qureshi, Nestle’s chief executive officer for the Greater China region.
“Right now the overall soluble coffee in China is growing between 3-5% (a year) and we believe that by bringing this exciting new business opportunity we should be able to grow faster than that,” he said while talking about a category that comprises of capsule and instant coffee.
The growth of the Swiss company in the first half of the current year was slower than normal in China – which is its second largest market. The company has said that the sale of other categories such as mainstream baby foods have been under pressure compared to the pricier products offered by the company in China.
The business opportunity for coffee in China, according to Nestle is immense because compared to the per capita coffee consumption of about 400 a year in Japan and 300 in South Korea, it is just about 6 cups a year.
Currently, Nestle sells a wide range of coffee products already in China which includes Nescafe instant coffee range and Nespresso capsule coffees and Qureshi believes that the company would now have the added option of offering a premium coffee option to that range of products by the partnership with Starbucks.
Two new avenues for selling of its products in China has been opened by the partnership between Nestle and Starbucks, said Belinda Wong, CEO of Starbucks China. He said that his company has been making heavy investments in China for development of its store network and delivery even in the face of increased tough competition from some local brands and startups.
(Source:www.nytimes.com)
