Global food and drink company Nestle is doubling down on its coffee strategy in China, aiming to capture the growing appetite for diverse and high-quality coffee experiences among Chinese consumers.

Jiang Haiying, senior vice-president of Nestle Greater China Region and head of the coffee business unit, said the growth potential of the Chinese market has "strengthened our commitment to accelerate our coffee business in China".

Jiang said that the company's Asia, Oceania, and Africa (AOA) region holds high expectations for its performance in China, expressing confidence that the market will continue to deliver sustained growth.

She said that Nestle Coffee will pursue "bigger, fewer and better and more focused innovation projects", targeting cutting-edge trends in Chinese consumer behavior and coffee consumption to drive the next wave of expansion.

According to Nestle's 2025 first quarter results report released on April 24, the company's global coffee business achieved growth of 5.1 percent year-on-year.

Data from the China Coffee Industry Report 2024, jointly released by the World Federation of Chinese Catering Industry, show that although China's coffee exports hit a record low of 20,000 metric tons in 2023, imports grew by over 20 percent, reflecting surging domestic demand.

Coffee consumption in China has jumped 167 percent over the past decade, reaching 350,000 tons. The market has shifted from being dominated by instant coffee to a more diversified landscape, with freshly brewed coffee and retail coffee emerging as core segments.

Research institute Mintel Group forecasts that the retail value of instant coffee will reach 12.47 billion yuan ($1.7 billion) in 2023, up 5 percent year-on-year, and expects it to grow at a compound annual growth rate of 6.3 percent to reach 16.9 billion yuan by 2028.

Despite intensifying competition, instant coffee remains relevant due to its convenience, though it now faces pressure from both on-premise and retail coffee.

Marta Zhang, senior research analyst at Mintel, said, "Proactive innovation and the ability to offer holistic value — ranging from taste and health benefits to emotional and social impact — will be key differentiators for brands."

Nestle continues to lead the instant coffee segment in China, according to Mintel, thanks to its wide product portfolio and strong brand equity.

While new entrants and on-premise brands are rapidly expanding their retail presence, Nestle's recent innovation push aims to stay ahead of emerging consumer expectations.

Other leading instant coffee drink brands include JDE Peet's, the Saturnbird Coffee, and Trung Nguyen Group Corp, according to Mintel.

On April 17, Nestle Coffee unveiled a major upgrade to its classic 1+2 formula. In response to growing health consciousness and diversified flavor preferences, the brand is introducing a coffee concentrate with a coconut flavor, blending a rich coffee taste with tropical refreshments.

The move aligns with findings from the 2024 monitoring report by iResearch, which identified coffee concentrate as the fastest-growing segment.

The food and drink company is also expanding its ready-to-drink coffee offerings with new flavors such as the osmanthus longjing latte and coconut latte, designed to appeal to consumers in outdoor and mobile settings.

The upgraded line includes sugar-free Americano, iced coconut Americano, and its signature Americano, catering to evolving tastes and consumption scenarios — from home and office use to on-the-go lifestyles.

As more Chinese consumers embrace coffee not only as a beverage but as an emotional experience and part of daily life, the company is betting that innovation, health-conscious offerings, and scenario-driven product design will fuel the next phase of its growth in China's dynamic coffee market.