How Nescafé Instant Coffee Is Made

This is a coffee field, and it's a good sign that there's a lot of beans on this field. Because if the weather here is good, there will be a lot of beans like this. With annual sales of $11.6 billion as of December 2023, Nescafé is Swiss-based food giant Nestlé's largest coffee segment. Nescafé is the strongest coffee brand in the world, but it's also the third largest non-alcoholic beverage brand in the world. Sold in over 180 countries, 1 in 7 cups of coffee consumed worldwide is Nescafé. Globally, about 3 billion cups of coffee are consumed each day, and that number is expected to rise to 6 billion by 2050. To keep up with demand, Nescafé works with over 100,000 farmers and buys more than 13 million bags of green coffee annually. It also has two dozen factories globally. But coffee producers are facing a number of challenges. There are several challenges of coffee growing, and if you look back, let's say for a generation ago, it is harder to grow coffee today. We have challenges related to climate change, but also there are challenges related to cost of production. So how is Nescafé instant produced? And what is the brand doing to increase its supply of coffee? CNBC traveled to Vietnam to get a behind-the-scenes look at Nestlé's operation to find out. In Vietnam's Central Highlands, growers eagerly await the annual coffee harvest in October, when coffee cherries turn deep red in color. Coffee was introduced in Vietnam in 1857. Today, Vietnam is the world's second largest exporter of coffee behind Brazil, which produces about 40% of the globe's coffee supply. Fluctuating coffee prices and high labor costs have caused financial difficulties for farmers in recent years. Water is another ongoing issue for coffee growers. The weather is unpredictable. When it's sunny, the sun shines for a long time, and when it rains, the flowers don't bloom. And if there are only a few coffee plants in this field, the smallest one, it means that the weather has affected this one. On her two-hectare farm, Nung has about 2,000 coffee trees. We work with more than 100,000 farmers around the world. The typical farm size would depend on the coffee-producing country. It can vary from very small holders like what we have here in Vietnam, with farms typically between 1 and 1.5 hectares in size, to quite large farms like you have in Brazil with tens or hundreds of hectares. Worldwide, about 125 million people depend on coffee for their livelihoods, with about 80% of coffee-farming families living at or below the poverty level. Coffee production faces other challenges too, including environmental damage like deforestation and child labor. Each year, Nescafé buys more than 800,000 metric tons of green coffee, with about 90% of the brand's coffee coming from just seven countries. Farmers also face an existential threat due to rising temperatures. Climate change could reduce the suitable area for growing coffee worldwide by up to 50% by 2050. Reduced incomes and uncertain yields have led many young growers to look at options other than farming. To encourage its producers, Nestlé said it would invest over a billion dollars in sustainability, allowing its farmers to incorporate methods like planting cover crops to help protect the soil, and organic fertilizers. It is also developing new plant varieties. With the new varieties, with high yield and good quality, we can increase the productivity of the coffee production in Vietnam and farmers can benefit from that. Since 2010, the company has distributed 235 million high-yield, disease-resistant coffee plantlets. Following the harvest, coffee beans are sent to the factory. Nescafé has more than 8,000 employees globally, working in 25 factories that produce instant coffee. So the coffee, when we come in, normally the coffee is drying the fuel, so therefore they contain a lot of foreign body. So we take the coffee in, we clean it completely, then we go to the area where we roast the product. Coffee beans are roasted, ground into a coarse powder, and put through an extraction process. In general, Nescafé Original uses a spray-drying method, which involves spraying liquid coffee extract as a fine mist into hot, dry air. The water evaporates, leaving behind small, round crystals. Nescafé Gold uses a freeze-dried method, which is achieved by freezing liquid coffee concentrate at minus 40 degrees, breaking it up into tiny pieces and sending it to a drying vacuum, where the ice vaporizes, leaving behind the instant coffee granules. The extraction process is where coffee grinds are removed, allowing the granules to dissolve in water. Robusta, a key ingredient in most instant coffees, accounts for about 95% of Vietnam's coffee output. The two main types of commercial coffee in use today are Robusta and Arabica. Robusta, known for its strong and bitter taste and higher levels of caffeine, is tolerant to temperature fluctuations. Arabica, which makes up about 60% of the world's coffee production, is less resistant to weather shocks, pests and disease. Increasingly erratic weather could mean we'll see more Robusta coffee in the future. So it is a strong possibility that when it affects climate change, it does mean more instant coffee. Coffee production in Vietnam reached almost 30 million bags in 2023. Where do we want to grow the business? It's really those emerging coffee markets that we call them, those 4 billion consumers that drink less than 20 cups per year per person, where we see China, India, but sub-Saharan Africa as well, where it's really, really important to develop those markets slowly into the coffee habit. The global coffee market is estimated at around $200 billion. About a quarter of that value comes from in-home consumption and three quarters comes from out-of-home consumption. Despite that, roughly 75% of all cups of coffee are consumed at home. Every second, 6,100 cups of Nescafé are consumed worldwide. Nescafé might be the only brand in the world that really plays across all of the coffee segments that are available. So we don't have any dogma or any rule that we say Nescafé is a solvable brand. Nescafé is the world's favorite coffee brand, and that is how we want to show it for consumers.