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. Last Updated: 07/27/2016

Nestle Kicks Off Push for 'Gold'

Estimating that the market for premium coffees in Russia will double in the next two years, Nestle Foods is brewing up a plan to draw more of Russia's caffeine-seekers to its instant Nescafe Gold brand.

"Nescafe Gold is the most recognized and best selling premium coffee in Russia," Nestle Russia marketing director Bernard Meunier told a press conference Tuesday, kicking off an "aggressive" promotion campaign to expand the brand's niche in a nation of more than 100 million coffee drinkers.

Meunier declined to say how much Nestle would spend on the countrywide marketing campaign, which will include television and print spots, but said the company spends $20 million annually advertising its products in Russia.

The stakes for the Russian coffee market are no small beans: 83 percent of Russians drink coffee at least once a month with 44 percent drinking it daily, making it the nation's second favorite beverage after tea, Meunier said, citing a report by Gallup Media.

Meunier said Nescafe products capture a 40 percent share of the country's coffee market.

Only 5 percent of that market is for what he called "premium coffees" -- a high-quality product that can be either instant or whole bean and ground, he said. He estimated that figure would rise to 10 percent by 1998, up from just 1 percent in 1993, as Russians' disposable income grows and high-end brands become more available.

Like 95 percent of coffee consumed in Russia, Nescafe Gold is instant. But Meunier stressed it was "premium coffee ... made of the finest, best coffee beans, for those who are special connoisseurs."

Alexander Malchik, the president of Montana Coffee Traders, a Moscow company that sells fresh-roasted, whole-bean coffees, was unconcerned about Nescafe's entry into the "premium coffee" market.

"I don't consider them competitors. The specialty coffee business is a special culture, and the coffee we produce is a special product," Malchik said. "We have a different market, different customers -- people who love coffee."

Nestl? Foods, a Swiss-based multinational, also sells its other coffee brands, such as Nescafe Classic, in Russia.

Nescafe Gold -- which Meunier said had been specially formulated to appeal to Russian tastes for a coffee that was not too acidic, not too robust -- already has its adherents. A kiosk operator in northern Moscow, who had four different types of instant coffee on offer, said the brand was her biggest seller.

"You just open the jar and it's great -- it smells like real coffee," said Olga Iontseva. "And when you make it, it still has this great smell.

"I've got problems with my small intestines. With these other coffees, I feel it in my stomach right away," she said.

"But this one I can drink. It increases my activity, but it doesn't affect my intestines."