Nestle overhauls Nescafe to brew up ‘powerful umbrella’ strategy
Nestle is brewing up a unified approach to marketing its Nescafe coffee brand worldwide in the hopes of kickstarting weak sales as it looks to protect its market-leading position in the $$81bn (£47.4bn) category.
The Swiss company is bringing its coffee brand under what it claims is a “powerful umbrella” of a new “REDvolution” visual identity and slogan “It all starts with a Nescafé”.
Nescafe’s new look revolves around the brand’s red accent, its trademark red branded mug and a stylised graphic of the aerial view of the coffee mug. It is the first time in the coffee’s 75-year history that all its products will share the same theme across marketing, communications, packaging and digital strategy in all 180 counties where it is sold.
The strategy has been developed to give local markets flexibility with the business pushing to modernise the brand in the face of a new generation of drinkers raised on convenience alternatives from Starbucks and Costa Coffee.
The trend hit Nestle’s latest quarter where sales slowed to 4.2 per cent, missing a target of between 5 and 6 per cent. Analysts estimate Nescafé generates as much as $13.5bn (£7.9bn), or 59 per cent of the category’s revenue, and about a fifth of Nestlé’s operating profit of 14.05bn Swiss francs (£9.2bn). Coffee accounts for a third of the company’s global revenue but slowing emerging market sales combined with weak demand in America has highlighted the need for more radical initiatives to kickstart demand.
The brand’s decline was also steered by the rise of single-serve coffee, which has been led by sister-brand Nespresso. While sales of the system have flagged lately due to copycat products, particularly across Europe, Nescafe coffee machines are rolling out to markets in Asia where it is seen as a luxury product.
Patrice Bula, Nestlé’s global head of marketing, says Nescafe is one of the “cornerstones of our company” and a symbol of “Nestlé all around the world”.
A marketing campaign will launch later this summer to tout the overhaul and appeal to younger drinkers. Additionally, new products and recipes will are planned, including its milk-rich ready-to-drink Shakissmo variant in seven European markets.
“Nescafé is a pioneering brand,” adds Bula “We need to demonstrate that this brand is as relevant today as it was 75 years ago, with a portfolio that satisfies the changing world of coffee and evolving.”
The “REDvolution” focus on giving the brand a modern twist extends to the online arena, where several innovations are planned. Plans are underway to introduce a social alarm clock that provides a personalised wake-up call as well campaigns to expand its Facebook presence.
The revamp comes weeks after rival Mondelez International spun off its coffee business to form the world’s second largest player in the category and challenge Nestle’s dominance.
Nestle is also looking to its core brands to help spark the sales turnaround. In the UK, the brand is rolling out new packaging for its Kit Kat brand, which has been developed by design agency Anthem, to celebrate its heritage.
