Bloomberg News

Nestle Plans 220 Million-Euro Nescafe Factory in Germany

February 24, 2012

Nestle SA (NESN), the world’s biggest food company, plans to spend 220 million euros ($295 million) to build a factory in Germany to make Nescafe Dolce Gusto coffee.

The plant in Schwerin, in the north of the country, will produce about 2 billion coffee capsules a year, Vevey, Switzerland-based Nestle said today in a statement. The project will create 450 jobs.

Sales of the capsule-based variety of Nescafe instant coffee are growing at more than 50 percent, making it one of Nestle’s fastest-selling brands in Europe, the company said. Dolce Gusto may generate 1 billion Swiss francs ($1.1 billion) in annual revenue by 2013, Laurent Freixe, the head of Nestle’s Europe business, said on a webcast. The brand was introduced in 2006 and is now available in 56 countries.

“We expect to have the factory up and running, ready to produce, by the end of next year,” Freixe said.

Germany is Nescafe Dolce Gusto’s largest market, according to Nestle. The capsules produced at the plant, the Swiss company’s third Dolce Gusto factory, will be shipped to the rest of Germany as well as eastern Europe and Scandinavia. Germany is Nestle’s fourth-biggest market.

To contact the reporter on this story: Dermot Doherty in Geneva at ddoherty9@bloomberg.net

To contact the editor responsible for this story: Sara Marley at smarley1@bloomberg.net


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