Nescafe Targets Gen Z with New Cold Coffee Offerings Amid Shift in Trends

In a strategic pivot to adapt to changing consumer preferences, Nestlé-owned Nescafe is focusing on attracting Generation Z coffee drinkers by expanding its product line to include cold coffee options. This initiative comes in response to a notable shift in consumption habits among younger demographics, particularly the rising popularity of iced coffee beverages, which now account for approximately 32% of out-of-home coffee consumption, according to internal estimates from Nescafe.

Nescafe, known for its long-standing history as a leader in the coffee market since the launch of its soluble powdered coffee in 1938, is now embracing a new direction to capture a younger audience. "We have to develop solutions specifically to bring young people into the Nescafe brand," stated Don Howat, the global category lead for Nescafe at Nestlé. This strategic focus aims to reposition Nescafe's offerings to appeal to consumers not just in the morning but throughout the day, particularly in the afternoon when iced coffee is often consumed.

The significance of this shift is underscored by the competitive landscape of the coffee industry, where Nescafe has faced challenges in recent years, lagging behind rivals such as Unilever and Danone. The company’s stock performance has reflected this struggle, with CEO Laurent Freixe emphasizing the need to refocus on core categories, including coffee. "We want fewer, bigger, better innovations. We want breakthrough and impact," Freixe stated at a recent media event, highlighting the importance of coffee as a priority area for growth.

The latest product from Nescafe, the Espresso Concentrate, represents a novel approach to product development. This cold liquid concentrate, designed for customization, allows consumers to create their own chilled coffee beverages by mixing it with various ingredients, such as milk or lemonade. Initially launched in Australia in late 2024, the product has since rolled out to multiple markets, including the U.S., U.K., Canada, Japan, China, and Singapore, with plans for further expansion.

Nescafe's strategy also taps into broader societal trends among younger consumers, particularly regarding alcohol consumption. Research indicates that Generation Z is drinking significantly less alcohol than previous generations, prompting a growing interest in non-alcoholic beverages. "What’s interesting about younger consumers is they’re drinking a lot less alcohol," Howat noted, suggesting that Nescafe aims to position coffee as a sophisticated, all-day alternative for social occasions.

The company has also partnered with social media influencer Zach King to market its new offerings, demonstrating an understanding of where younger consumers engage with brands. The collaboration is part of a larger effort to resonate with Gen Z, whose preferences are shaping the future of the beverage market.

In conclusion, Nescafe’s renewed focus on cold coffee products and customization reflects a calculated response to shifting consumer behaviors. As the company seeks to attract a younger demographic, it may pave the way for further expansion into related markets, such as tea and health-oriented products. The implications of this strategy could not only enhance Nescafe’s market presence but also redefine coffee consumption patterns among the next generation of drinkers.