Will Starbucks milk powder become the new coffee companion

When you taste coffee, will you choose the “company” of cream? You may not be unfamiliar with coffee partners, but have you ever heard of Starbucks’ own creamer?

In August, Starbucks cream will appear in Wal Mart, target, Kroger and other retail stores in the United States, which is a new product jointly launched by Starbucks and Nestle.

The alliance between the two industry giants began on August 28, 2018. After paying Starbucks $7.15 billion, Nestle obtained the permanent right to sell Starbucks packaged coffee and tea products outside the global coffee stores.

In February this year, Starbucks’ single cup capsule coffee, which uses Nestle Nespresso and Nescaf é Dolce gusto machines, made its debut in the market. This time, Starbucks cream is the result of the fourth cooperation between the two companies.

There are three flavors of Starbucks creamer: Caramel, white chocolate and cinnamon, inspired by three of the most popular handmade drinks in physical coffee shops: caramel macchiato, white chocolate mocha and cinnamon Dolce latte.

Daniel Jhung, President of Nestle in the United States, said that since August, American consumers can see Starbucks cream in major retail stores, but the products will not be sold in Starbucks’ physical coffee shops, because the license agreement obtained by Nestle does not include Starbucks’ own coffee shops and ready to drink products.

As for why they choose cream products, Nestle and Starbucks give the answer.

At the beginning of the cooperation, the two companies aimed at the coffee cream market. According to the American Coffee Association, about two-thirds of American consumers add creamer to their coffee. The creamy texture of the cream can improve the taste of the finished coffee. Among consumers aged 18-24, the proportion has risen to 71%. Daniel Jhung mentioned in the email that the demand of millennials will drive the rapid development of Starbucks milk powder in the industry.

At the same time, according to the statistics of Mintel, a market research company, the retail sales of cream and cream in the United States increased by about 5% in 2018, reaching nearly $6 billion. It is estimated that by 2023, the market sales will exceed 7.8 billion US dollars. In contrast, retail sales in the coffee market will grow by 4% in 2018 to $14.4 billion and reach $18.2 billion by 2023.

Sales of cream and non dairy creamers in the United States have grown by an average of 2.8% a year in the past four years as of the end of June, while sales of packaged coffee have grown by an average of 0.8% a year, according to Nielsen, a data service company based on Netcom. At the time of the birth of Starbucks milk powder, the development speed of American milk powder market has exceeded the overall coffee sales market.

“Since the launch of coffee companion in 1961, Nestle has led the development of the cream industry, and we have been promoting the increase of product categories.” Daniel Jhung said: “we see an opportunity for innovation in our collaboration, and Starbucks creamer enables consumers to enjoy the Starbucks flavor they know and love at home.”

Nestle has more than 50 years of professional influence in the cream market, while Starbucks also has nearly 50 years of history and a popular coffee shop style. It took less than a year for Starbucks cream to combine the advantages of the two companies from the start of research and development to the shelf.

On the one hand, the emergence of Starbucks cream will expand Nestle’s existing coffee mate, natural bliss and other product portfolio, but on the other hand, it will bring “concerns” to some traditional coffee brands.

New products such as Starbucks creamer and Starbucks capsule coffee may have an impact on Nestle’s own beverage development, including Nestle Nescaf é series of baked and instant coffee, the market demand for these two types of coffee is gradually decreasing.

As the largest part of the coffee market in the United States, roasted coffee accounts for 40% of the market share, but it has little development in 2016-2018. Sales of instant coffee have declined with the increase of instant coffee sales.

According to the influence of food services in the retail market, many of the fast-growing brands are coffee shops and restaurants, and instant coffee brands such as foggers and Maxwell are advancing in the crisis.