Nestlé opens $340M Nescafé coffee factory in Mexico

Nestlé’s $340 million Nescafé coffee factory opened in Veracruz, Mexico, creating 1,200 new jobs in the region and making the country bordering the U.S. its main producer of the popular beverage globally.

The Switzerland-based food and beverage giant said the new factory includes state-of-the-art equipment and uses green energy to reduce water and energy consumption. Nestlé said it uses wastewater treatment systems to ensure 100% of water recirculation, zero wastewater discharges and zero waste to landfills. The facility also is equipped with a biomass boiler to use waste from the coffee process to generate energy.

Coffee consumption has risen to a two-decade high as Americans engage in new post-COVID routines, according to a poll by the National Coffee Association released in March. An estimated two-thirds of Americans now drink coffee each day, more than any other beverage including tap water, up nearly 14% since January 2021.

Nestlé has been among the biggest beneficiaries. In April, the company said its coffee portfolio posted high single-digit growth fueled by continued demand for Nescafé, Starbucks and Nespresso. Nescafé is the largest brand for Nestlé, Forbes noted in 2020.

Nestlé has moved aggressively in recent years to reorganize its portfolio to prioritize faster-growing offerings like coffee while jettisoning slower-growing businesses such as ice cream, candy and much of its waters in the U.S. The shift has been followed closely with plant expansions or the construction of new manufacturing facilities.

Earlier this year, Nestlé said it planned to spend $675 million on a factory in Glendale, Arizona, to meet the growing demand for some of its beverages. The new facility, which will create more than 350 jobs, will produce creamers for its Coffee mate, Coffee mate Natural Bliss and Starbucks brands. 

Other CPGs also have started construction on new plants or announced expansions to existing ones to prepare for future demand. PepsiCo’s beverage division recently announced plans to build a 1.2 million-square-foot manufacturing facility in Colorado that will be its largest plant in the U.S. when it opens next summer.