Nestle India’s March 2026 quarter results, which saw a 26% rise in net profit and 22.6% revenue growth, were heavily driven, among other brands, by its power brand Nescafé. The brand recorded high double-digit growth in both value and volume in the powdered and liquid beverages category. Company chairman and MD Manish Tiwary noted that Nestlé recorded its highest domestic sales in the last quarter, while Nescafé gained market share in the last couple of years. Lower coffee prices, thanks to favourable crops in Vietnam and Brazil, helped maintain strong margins for the beverage brand.
Industry estimates put the instant coffee market in India at around Rs 10,000 crore. Nescafé accounts for over 50% of this market, followed by Hindustan Unilever’s Bru at 30-32% share. Experts note that the rise of coffee chains and ready-to-drink (RTD) formats have also helped boost growth for the instant coffee market.
Nescafé continues to recruit new consumers into the coffee category, says Sunayan Mitra, head, liquid and powdered beverages at Nestlé India. “Our sustained double-digit growth is the outcome of a consistent, multi-year strategy with a sharp focus on category expansion. Nescafé Classic has been central to this effort. Improved accessibility through affordable packs and sharper distribution played a key role in creating everyday relevance,” explains Mitra.
Nescafé sells sachets for as little as Rs 2, thus addressing price sensitivities in the market. That said, Mitra adds that premiumisation is another key growth lever for the brand, in line with a growing preference for café style experiences at home. Brands such as Nescafé Roastery and Nescafé Gold are leading its premiumisation play.
Ankur Bisen, senior partner and head, consulting, retail, consumer products and food for The Knowledge Company, points out that like Maggi and KitKat, Nescafé has been built for the Indian market. He credits the brand with creating the coffee category in India, taking it beyond filter coffees and the South markets of the country. “The brand’s advertising has also been largely emotive, reflecting Indian cultural nuances and sentiments. This has created a rich legacy, which drives its growth momentum. We have seen other regional brands and large challenger brands like Bru and Tata Coffee, but none have come close to Nescafé in terms of size and scale,” he observes, noting that globally, coffee has been a core offering for Nestlé.
Recipe for success
One of the key factors driving growth for the Nescafé brand is Nestlé India’s rural expansion. Rural markets now contribute around 20% to the company’s business. According to Sachin Bobade, head of research at Monarch Capital, the company’s increasingly ‘rurban’ or rural-urban strategy lies at the heart of Nestle’s success for its core brands like Maggi, Nescafe and KitKat. “Nescafé managed to get quite a few things right in what was predominantly a tea-drinking market. Aside from its pricing, it has widened its reach to over 200,000 villages in the country, driving up rural consumption. However, the company hasn’t taken its eye off the premium and urban growth opportunity either,” observes Bobade.
Beefing up its portfolio has helped. The company expanded Nescafe Duo Gusto with hot and cold variants and introduced low- and zero-sugar options. Mitra says the brand is tapping into emerging consumption trends, especially cold coffee, which is fast-growing segment among Gen Z consumers. It sped up the ready-to-drink campaign with offerings such as Vietnamese Latte and Iced Cappuccino, signalling RTD would be a key future growth driver.
Mitra says Nescafé is deepening its rural footprint, improving last mile availability and complementing that with demand-generation activities through media and other consumer touchpoints. “There is still significant headroom for growth, given the gap between rural and urban consumption,” he adds. Interestingly, Nestlé India hiked its advertising spends by over 50% in the March quarter, which helped give the brand a volume boost.
The Knowledge Company’s Bisen says it would be interesting to see how the brand holds up in the premium end of the market against new direct-to-consumer and specialty brands like Blue Tokai, Sleepy Owl, and Third Wave Coffee and attract Gen Z and millennial consumers who prefer artisanal, fresh, or cold brews over traditional instant coffee.
Rising input costs remain a bugbear. Following its Q4 fiscal 2026 results announced around early May 2026, the company indicated a shift toward potential price adjustments for its products due to continued commodity inflation (milk, wheat, coffee) and increased logistics costs fueled by the Iran conflict.