At-Home Coffee Routines Drive Sales for Nestlé

At-Home Coffee Routines Drive Sales for Nestlé

Nestlé’s Q1 Sales Climb 7.7%

Nestlé’s first quarter sales rose 7.7%, driven by strong demand for its coffee products. The company’s coffee pods, instant coffee, and Starbucks (SBUX)-branded products were the biggest contributors to this growth. Nestlé’s Nespresso products were in particular demand during the first quarter, with sales up 17.1%.

When the pandemic hit last March, consumers in the US rushed to get their hands on as much coffee as they could, creating coffee shortages at supermarkets across the globe. As the pandemic went on and people continued to work from home, they continued to buy coffee as well as coffee machines to replicate drinks they used to order at coffee shops. This trend has driven demand for espresso machines, French presses, and pour-over brewers. Nestlé’s recent report shows that these trends have continued even as some people begin to return to offices and coffee shops.

Nestlé’s Coffee Investments Pay Off

Nestlé has been making big bets that coffee would be a growth driver. When demand for at-home coffee surged during the pandemic, Nestlé was ready. The company has sold off non core assets in recent years, including its confectionery business, and has doubled down on coffee. In 2018 Nestlé paid Starbucks $7 billion to secure the rights to sell its packaged coffee beans, single-serve coffee, and other products at grocery and retail stores. Nestlé has acquired smaller coffee brands which cater to younger consumers, including Chameleon Cold Brew.

In March Nestlé announced plans to expand Nespresso production and distribution centers in Switzerland to meet demand from consumers across the globe.

Keeping Up the At-Home Coffee Momentum

Nestlé’s biggest challenge now is keeping the growth going as some parts of the world begin to emerge from pandemic shutdowns. As coffee shops reopen and people go back to work, demand for at-home coffee may wane.

Nestlé is addressing this by rolling out new coffee machines which are touchless and safer to use in office settings. It is also launching new products and coffee flavors for the at-home market.

The company is pulling out all the stops to keep the momentum going in its coffee business. The pandemic has upended many daily routines, including how people drink their morning coffee. Nestlé and other companies are eager to see if and when coffee drinkers will return to pre-pandemic habits.

Things are changing daily within the financial world. Sign up for the SoFi Daily Newsletter to get the latest news updates in your inbox every weekday.

Sign up

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store SoFi Android App, Get it on Google Play

ABOUT Meg Richardson Meg Richardson is a writer specializing in markets, technology, and personal finance. She loves breaking down seemingly complex ideas and making them readable and interesting for everyone. She holds an MFA in writing from Columbia University. When she is not writing about finance, she enjoys running in Central Park and drawing cartoons.

TLS 1.2 Encrypted
Equal Housing Lender