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City coffee commotion hits China

City coffee commotion hits China

Diversification is the name of the game.

Starbucks and Nestlé’s partnership faces a challenging point as the coffee market may start to taper off from its growth in previous years.

On-demand delivery service Luckin and new boutique coffee shops are also booming. It’s a race to capture consumers with distinctive tastes for better-quality coffee.

But Starbucks and Nestlé are getting their hopes up as they attempt to reach into homes and workplaces as traditional retail channels are now reaching saturation.

It was last year when Swiss-based Nestlé and Starbucks forged a deal giving Nestlé perpetual rights to market Starbucks consumer-packaged products globally outside of the company’s coffee shops.

“Starbucks at Home” is a new attempt to make people enjoy their favorite Starbuck’s beverage. They can buy Starbucks whole beans, ground or instant coffee, pods or even cold brew pitcher packs to make cups of coffee at home or at work.

The primary focus is on workplaces in first-tier cities, with later expansion into hotels and restaurants revealed Altug Guven, senior vice president of Nestlé’s coffee business in China.

While the trend undeniably moved to to freshly made drinks. Nestle is trying to increase sales by putting Starbuck’s flavors into its coffee capsule Nespresso machines. Nestlé’s plan of action is to avoid office locations where consumers can already have drinks delivered or buy them to-go and would probably be concentrating on business in the suburbs.

The market for roast coffee and instant coffee, excluding packaged and fresh coffee drinks, is expected to increase 15 percent to US$8.2 billion this year, according to research firm Statistica.


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