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Nestle cashing in on coffee items

May 04, 2010|By Zain Shauk

DOWNTOWN — New products and an ad campaign aimed at winning over cost-conscious coffee drinkers are boosting sales figures for Glendale-based Nestle, the maker of NesCafe and CoffeeMate.

The world’s largest food and beverage corporation, which employs 1,600 workers at its U.S. headquarters in Glendale and 23,000 at its facilities nationwide, reported a 6% increase in per-cup consumption for its soluble coffee products since the start of the year.

That increase came as Nestle kicked off a new marketing campaign for its CoffeeMate products that includes an online savings calculator for consumers to compare what they might spend at a coffee shop.

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Coffee has become an increasingly common part of morning routines for Americans, many of whom visit cafes or coffee shops to get freshly brewed blends. But more of those coffee drinkers are becoming conscious of the cost associated with daily visits to a Starbucks or other shops, industry executives say.

That’s why companies like Nestle are becoming more aggressive in positioning their instant coffee products as thrifty alternatives, they said.

“There’s a way they can do it, enjoy it at home and still have that same great taste,” said Pam Krebs, a spokeswoman for Nestle’s beverages division.

Starbucks has also tried to capture more customers who are looking for cheaper alternatives to coffee shops.

The company last month announced it was expanding distribution of its VIA Ready Brew coffee, which will be available in 37,000 stores in June, up from 12,000 in September 2009.

“We know people are looking for products that will make their lives easier, and Starbucks VIA is exceeding our expectations in customer adoption and performance,” Chief Executive Howard Schultz said in a statement.

Vernon-based Gaviña & Sons, the maker of private-label coffees sold at McDonald’s, 7-Eleven, Costco and Porto’s Bakery, also reported increased demand for its Don Francisco instant coffee brands.

“I think you have a lot of people that are trying to cut corners and save some money, so if you have an interesting instant coffee, they would try it,” said Jack Kyser, chief economist of the Los Angeles County Economic Development Corporation.

Nestle’s latest change is the addition of a year-round peppermint mocha creamer, a part of its CoffeeMate line that was available only seasonally.

The company hopes its marketing and creamer options will allow customers familiar with unique flavors at coffee shops to get a similar taste out of cheaper, store-bought alternatives, Krebs said.


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