Nestlé’s strength in emerging markets may be what stands in the way of Jacobs Douwe Egberts’ goal of dominating the global coffee market.
Since the formation of Jacobs Douwe Egberts (JDE) in 2015, the global retail coffee market is fast becoming a bipolar struggle between JDE and the global market leader Nestlé.
The market leader in most countries outside of the Americas is either Nestlé or JDE.
Growth in JDE’s core Central and Eastern European markets, though, is going to become increasingly hard to come by. That means that if JDE is serious about gaining share on Nestlé globally, it will have to shift a significant amount of its focus to the developing regions that are the drivers of global coffee growth.
To do this, JDE only has a few geographic options going forwards. One is Latin America, but outside of Brazil the company has no meaningful presence and Nestlé is firmly entrenched at the top of key markets such as Mexico.
Another is the Middle East and Africa, but JDE is actually losing share in the Middle East at the moment, hardly an encouraging sign.
That leaves Asia, more specifically, South-East Asia. Rapidly expanding markets, a favourable competitive landscape and the recent purchase of Singapore-based Super Group all make this the key area where JDE needs to succeed if it is to make a real challenge to Nestlé’s global coffee leadership.