Business Intelligence on Retailing, Franchising, and Consumerism in China

Nestle To Invest CNY100 Million To Build Coffee Center In China

Nestle announced plans to invest at least CNY100 million to build a coffee center in China, aiming to improve coffee consumption in the Chinese market.

Heiko Schipper, director for Nestle Greater China business, said that the coffee industry has a large growth space in mainland China, because the coffee consumption in mainland China is lower than other regions in the Greater China market. He pointed out that since the per capita coffee consumption in mainland China is at a low level, the coffee industry has great potential. In addition, the overall coffee consumption in this marketplace is also low, which is four cups per capita. In Hong Kong and Taiwan, the number is 100 to 150 per capita.

Nestle said that this new coffee center will be built in Yunnan province and it aims to train 5,000 farmers, agronomists and coffee professionals each year. Meanwhile, the coffee center will have a coffee testing lab and consumer education facilities.

According to the latest annual report from Nestle, China has become the second largest market of the company and its annual sales in this market was about CHF6 billion, which was about CNY39 billion. Since 2010, Nestle has set up a bottling water joint venture, and acquired a controlling stake in Hsu Fu Chi and Yinlu in China. In 2012, the company acquired the infant nutrition business from Pfizer, which is expected to improve Nestle's share in the Chinese infant food market.

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