Nescafe is the most popular coffee brand across the globe and beats a number of reputed brands in the market. In this blog, we will understand her SWOT analysis of Nescafe in detail.
About Nescafe
Nestle is the home to Nescafe and it is so most strongest platform for revenue for the Nestle brand. Apart from Maggi, the brand is one of the biggest products Nestle has in its bag. It is the most famous instant coffee brand in the market and was developed in Brazil.
Later on, Europe was a significant place for the production of instant coffee. The customers of Europe gave less preference to the instant coffee trend and it started exporting to other countries. As per the reports the United States of America had the most optimistic response which then experienced expansion to more than 100 countries.
Nescafe at a Glance
| Owner | Nestlé |
| Year of Establishment | April 1, 1938 |
| Annual Revenue (as of FY24) | £2.3bn |
| Origin | Switzerland |
| Total no. of employees | Approx. 270,000 |
SWOT Analysis of Nescafe
The SWOT analysis of Nescafe includes 4 major factors like weaknesses, strengths, opportunities, and threats in detail.
Strength of Nescafe
Below are the major strengths of Nescafe –
Huge brand equity
Nescafe has a brand value that is the biggest in the Swiss portfolio. The company also has a strong financial package from its home brand Nestle that offers a number of sources to the company.
Top quality & diversity
Nescafe is the best quality product and managers easily stay away from their rivals. The company possesses high-quality control techniques and has accurately managed to develop a classic bond with a loyal base of customers.
Moreover, the company offers a large diversity when it comes to taste. A number of various types of coffee beans are used in the production which gives it a large variety of products.
Amazing promotions
Nescafe is quite strong when it comes to promotional campaigns that are popular worldwide. It helps gain visibility in the fastest manner.
Weaknesses of Nescafe
Nescafe holds major weaknesses including –
Health conscious customers
Today people are getting more health conscious which is why they are avoiding caffeine-related drinks. This trend among customers is causing a loss in the sales of instant coffee products. Therefore Nescafe should focus on creating healthy coffee drinks that customers would prefer choosing.
Less demand for Coffee
A number of carbonated drinks t and different types of beverages take a lot of market share from Nescafe. Different regions across the globe prefer tea over coffee. Hence, Nescafe should focus on innovating its products and keep its customer base engaged with its innovative products.
Opportunities for Nescafe
The brand enjoys opportunities from the below segments –
Smart Collaborations
Nescafe can collaborate with different ranges of corporate, and educational institutions, as well as, public businesses for great profits as well as market share. It can also collaborate with farmers for better deals in cocoa sales.
Creating diverse portfolio
Nescafe can also produce cookies or biscuits to be sold with its instant coffee. The brand can also produce many different products that will be a good match with the coffee flavor. It will boost the revenue of the brand and will also keep customers intact with the company.
Increasing public income
Today, the income of the public in India is on the Rise which is moving towards premium testing of coffee in the beverage segment. Therefore they have a very high customer potential shifting towards coffee-related drinks.
Threats to Nescafe
The major threats for Nescafe include –
Severe competition
Bru is the market leader in India in terms of the beverage segment. It is giving high competition to Nescafe which is getting more intense with different brands growing in the market including Starbucks.
Cocoa issues
The farmers developing cocoa are confronting severe issues in cultivation as well as in selling the products. These severe issues may hamper international brands like Nescafe which is totally based on the cultivation of cocoa.
Top Competitors of Nescafe
Here are the top five competitors of Nescafe –
1. Starbucks
It is a worldwide famous coffee house chain that is strongly competitive with Nescafe in packaged coffee products and retail stores.
2. Bru
It is the Hindustan Unilever Limited product which is the major competitor to Nescafe in the Indian market offering instant coffee products.
3. Tata coffee
It is also a leading player in the Indian Coffee industry having competition with Nescafe in different coffee products.
4. Lavazza
Lavazza is an Italian coffee brand competing with Nescafe in the professional as well as retail segments.
5. McCafe
It is the coffee house brand of McDonald’s competing with Nescafe by offering high quality as well as affordable coffee in its outlets.
Conclusion
The SWOT Analysis of Nescafe sheds light on the major strengths, weaknesses, opportunities as well as hazards it faces in the market. To expect exponential growth in the coming years the brand should bring innovative coffee products that are also healthy for the customers looking for advanced health drink options. The company should also focus more on resolving its weaknesses and converting them into strengths for exceptional revenue.