Nestle SA is producing at full tilt in Brazil as it responds to a lift in coffee demand from house-bound drinkers and builds inventories to guard against supply disruptions.
Robusta coffee prices headed for the biggest monthly gains in a decade amid fresh signs that the coronavirus pandemic is stimulating demand.
Nestle SA sailed past ailing consumer-goods rivals by reporting higher sales amid strong demand for coffee in home offices and pet food.
Working with more than 2,000 farmers, the Nestle SA unit is helping produce and market coffee from Uganda’s mountainous Rwenzori region. Nespresso’s so-called Reviving Origins program has already helped boost productivity in eastern Zimbabwe and Caqueta, Colombia. The company is selling their limited-edition capsules in markets including the U.S. and the U.K.
Bigger coffee makers like Nestle and Starbucks have more capacity to survive the closures than smaller, specialty producers, according to James Watson, a senior beverage analyst for Rabobank International. The result: “We may see a lot of coffee-shop closures, creating a bit of a vacuum” when communities open up, Watson said.