Nescafe Seeks Gen Z as Coffee Trends Evolve

Adapting to Changing Consumer Trends

The coffee industry is experiencing a significant shift, especially among younger consumers. Nescafe, a brand under the Nestle umbrella, is actively working to adapt its product lines to meet these evolving preferences. One of the key strategies being pursued is the expansion into the cold coffee market, which has seen a surge in popularity, particularly among Gen Z.

Nescafe's traditional stronghold has been in the morning, with consumers typically enjoying their coffee hot. However, the brand is now aiming to capture a broader audience by introducing products that can be consumed throughout the day, especially during the afternoon and in colder forms. This approach is designed to re-engage younger generations who are more accustomed to drinking coffee cold.

The Rise of Cold Coffee Consumption

According to internal estimates, one-third (32%) of out-of-home coffee consumption is now iced. For many younger consumers, this is often their first experience with coffee. Nescafe’s global category lead, Don Howat, emphasized the importance of creating solutions that appeal specifically to this demographic.

“We’re trying to move into a space which is throughout the day — more in the afternoon, consumed cold, retargeting that younger generation,” Howat explained. This strategy is seen as a significant growth opportunity for Nescafe.

Strategic Focus on Coffee

Coffee remains a crucial area of focus for Nestle, with Nescafe and its sister brand Nespresso representing two of the company’s six key priorities for 2025. This marks a return to the core business for the world's largest food and beverage company, which also operates under brands like Purina and KitKat.

Despite challenges, including weaker sales growth and revised guidance, Nestle’s CEO, Laurent Freixe, has pledged to refocus the company. He criticized previous acquisitions for weakening the company’s foundation and emphasized the need for fewer, bigger, and more impactful innovations.

Innovation in Product Development

Nestle’s latest innovation, the Nescafe Espresso Concentrate, represents a new direction in product development. This cold liquid concentrate can serve as a base for chilled caffeine drinks and was developed in an R&D accelerator before being tested in U.S. Kroger stores.

Unlike many other cold coffee products that are pre-mixed and ready-to-drink, Nescafe’s concentrate aims for customization. Consumers can tailor their drinks at home by adding milk, water, lemonade, or other beverages according to their preferences.

“This provides a super exciting growth opportunity for Nescafe,” Howat said.

Expanding Markets and Collaborations

The product was launched in Australia in late 2024 and has since expanded to the U.S., U.K., Canada, Japan, China, and Singapore, with plans for further international markets. A collaboration with influencer Zach King is helping to promote the product on social media platforms.

“It’s achieving what we set out to achieve,” Howat added. “It just takes the brand into a different space.”

Exploring New Opportunities

Nescafe is also looking to expand into adjacent categories, such as traditional tea markets in countries like India, China, and Japan. The brand is focusing on customization, premiumization, and targeting new consumption occasions.

Howat noted that younger consumers are drinking less alcohol, which presents an opportunity for Nescafe to position coffee as an alternative. “When they socialize in the evening with their friends, they'd like to drink something which is adult but perhaps doesn't have alcohol,” he said.

This could open the door for Nescafe to introduce decaffeinated, cold, and indulgent products that cater to this trend. By adapting to changing consumer habits, Nescafe is positioning itself to remain relevant and competitive in an evolving market.