December 1, 2025 • 33 mins
In this episode of Brand Origins, we dig into the true history of Nescafé and the instant coffee wars. We uncover the early inventors who came before Nestlé, how instant coffee existed decades earlier, and how Nescafé still became the global leader and the Philippines’ #1 brand.
We break down how World War I and World War II turned instant coffee into a battlefield essential, how the Great Depression almost killed the idea entirely, and how Max Morganthaler saved a cancelled project that Nestlé had already abandoned. We also explore Café Puro, Blend 45, Nescafé Gold, Nespresso, Dolce Gusto, Starbucks At Home, and why Nestlé invested in Blue Bottle Coffee.
If you want to understand how instant coffee became part of Filipino culture, and how Nescafé won a global war it didn’t even start, this is the full story.
Episode Sponsor: The Sauce
For bite-sized, easy-to-digest business news in the Philippines, check out The Sauce on Instagram:
https://www.instagram.com/thesauce.ph/
Want your brand to be featured in future episodes?
Visit chrisgarin.com for sponsorships, partnerships, and collaborations.
Instagram: https://www.instagram.com/chris.garin/
TikTok: https://www.tiktok.com/@chris_garin
Facebook: https://www.facebook.com/profile.php?id=100077660561299
Threads: https://www.threads.net/@chris.garin
Timestamps
0:00 – Intro
0:50 – Ad: The Sauce
3:52 – Satori Kato
4:35 – George Washington Coffee
5:37 – World War I
6:18 – “Cup of Joe” Origins
8:25 – Nestlé Enters the Picture
9:05 – The Great Depression
11:23 – Brazil Taps Nestlé
11:36 – Max Morgenthaler
15:09 – Why They Called It “Nescafé”
16:33 – World War II
18:44 – Nescafé in the Philippines
19:25 – Nescafé’s Competitors
23:35 – Nescafé’s Foreign-Looking Ads
26:01 – Nescafé Gold
27:05 – Nespresso
28:31 – Dolce Gusto
28:48 – Starbucks At Home
30:27 – Blue Bottle Coffee
32:07 – The Nescafé Empire
About Brand Origins
Brand Origins tells the stories behind the biggest brands and the ideas that built them. Each episode dives deep into the business moves, cultural moments, and turning points that shaped the companies we see today.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
This is Nescafe in the Philippines.
It's hard not to see Nescafe everywhere.
And I'm not sure about you, but I used to think that Nescafe
invented instant coffee. But once again, I was wrong.
They didn't invent instant coffee.
It's a coffee was already aroundfor years before Nescafe came
in. But because of Nescafe, it's
everywhere. And when Nescafe arrived here in
the Philippines, they dominated.Although there were other
(00:21):
players since Nescafe's a part of Nestle, they simply outgunned
everyone. But there was 1 grand that
became a surprising challenger and they actually meet Nescafe
in a particular category. That brand is Copico.
Now this is a 2 parter video. OK.
In this video, I'm going to talkabout the crazy history of
instant coffee and the origins of Nescafe and how difficult it
(00:41):
was to create the perfect instant coffee that even Nestle
almost gave up. It just so happened that there
was this one scientist who kept working on it even though the
project was shut down. And in the next video, I'm going
to talk about the origin story of Copico and how they took the
lead from Nescafe here in the Philippines.
My name is Chris. Welcome to brand.
(01:06):
This episode was made possible by the sauce.
This sauce is the only news pagethat I can actually keep up in
because honestly, I don't reallyhave the time to consume these
long news reports. But I still want to get updated.
And that's why I like the sauce because they make this easy to
consume with their visuals that are clear, short and straight to
the point. And I can stay updated without
(01:27):
leaving Instagram. It's bite sized news that cuts
through all the noise so follow them.
It's at the sauce dot pH on Instagram.
The links are in the description.
You know when I was a kid when the word coffee was mentioned to
me, it meant Nescafe. That's what coffee meant to me
because that's what my parents had at home.
Starbucks coffee runs weren't a thing yet, at least not here in
(01:48):
ELO ELO. Or at least that's not what my
family did here. I would see my parents take
their coffee and it seems like all they needed was hot water,
sugar, and a pack of Nescafe. Like, that's it.
That's the coffee coffee experience.
And I think for most Filipinos that time, that's what coffee
meant for them too. Back then, coffee was simpler
because it had to be. I mean, sure, espresso machines
(02:09):
and coffee makers, they were already around that time, but
they weren't as accessible or affordable as they are today.
And we also didn't have YouTube to teach us all about the
nuances of making great coffee at home.
So we learned to love what we had.
All we had was hot water, sugar,Creamer and Nescafe.
Because if you wanted coffee in the morning, Nescafe was it.
And so it made me wonder why. Why is Nescafe the biggest brand
(02:31):
of instant coffee, not only herein the Philippines, but in so
many countries around the world?Did they invent instant coffee?
Well, no, because way before Nestle came into the picture,
there were already several attempts to make coffee more
convenient. The first version of instant
coffee came from the UK in 1771.Back then they referred to it
simply as coffee compound. I don't know exactly how it
(02:53):
tasted like, but I can imagine that it wasn't great.
In 1851, during the Civil War, Americans came up with their own
version of and coffee. They referred to it simply as
coffee cakes. It wasn't anything fancy, but
when soldiers were sent out to war when they were in the middle
of the battlefield, far from home in freezing temperatures,
having something warm to drink, even if it tasted so bad, it was
(03:14):
more than enough. They could turn a blind eye on
the face if it meant that even just for a moment, they could
stay warm and feel mentally alert.
Even though these coffee cakes tasted so bad, it did the job.
Now let's Fast forward 39 years later.
In 1890, there was this guy fromhis name was David Strang.
David Strang was trying to create a better way of making
(03:34):
instant coffee. And so he came up with this
method called as the dry hot airmethod.
And he patented this and this might actually be considered as
the world's first proper instantcoffee.
And what I mean proper, I'm not saying that it tastes great.
I'm just saying that it probablytastes so much better than the
horrible tasting coffee cakes. Eleven years after David Strang
version of instant coffee, therewas Satori Caro.
(03:56):
Satori Caro was a Japanese American chemist based in
Chicago. He created a more stable and
more enjoyable version of instant coffee.
He got it patented in 1903 and he even showed it off the Pan
American Exposition. And so for a while, people
actually thought that Satori Cairo invented instant coffee
until they discovered that DavidShang from New Zealand had
patented a version of instant coffee 11 years earlier.
(04:19):
Now, these attempts in making instant coffee, these were good
starting points, but they weren't good enough yet to
commercially mass produce. And there weren't any brands yet
that felt confident enough that it was good enough and good
tasting enough for people to want to buy.
But all of that changed when this guy came along.
His name was George Washington. This isn't the George Washington
(04:41):
you have in your mind. OK?
This George Washington was a Belgian American inventor.
And one time while he was in Guatemala, while waiting for his
coffee to be ready, he found himself noticing the dried
coffee residue forming on this silver pot of coffee.
And although it's something thateveryone else has before and is
honestly nothing extraordinary, for George Washington, it's like
(05:05):
a lightning bolt snapped an ideain his mind because he was
looking at this and he was like,I think there's something here.
I mean, we can do something withthis.
It was his Eureka moment. He rushed back to his kitchen
and got to work. And after several rounds of
trial and error, he came up witha new way to make instant
coffee. This led to the creation of
Ready coffee. Ready coffee is considered as
(05:27):
the first mass produced instant coffee in the US.
So George Washington launched the company and he was working
on figuring out how to get readycoffee all over the US.
And the timing couldn't be more perfect because around this
time, World War 2 happened. Since George Washington's
coffee, it was considered ahead of its time.
Back then, the US military choseGeorge Washington's company as
(05:48):
the main supplier of coffee, andthey made it a part of the
rations. And these are mostly staples
that are prepackaged, such as canned meat, biscuits.
And in this case, it now included George Washington's
coffee. The Canadian Expeditionary Force
made it a part of their rations in 1914, followed by the
American Expeditionary Force when they finally entered the
war in 1917. Eventually, this would all be be
(06:10):
allocated to the US military because of their incredible
demand for coffee, which at the final stage of the war was
around six times the national supply.
Oh, here's something interesting.
So you know how people call a cup of coffee cup of Joe?
So, well, there's a theory that it actually started with George
Washington's coffee. They say that back then,
soldiers would refer to their coffee as cup of George, since
(06:31):
it's from George Washington's coffee.
And over time, they say that George got shortened to Joe.
So instead of cup of George, it's just now a cup of Joe.
Some say that it came from a time when the US Navy banned
alcohol on their ships. And so since there was no
alcohol, they had to make do with coffee.
And then they started associating coffee as being the
drink of the common man or the average Joe.
(06:52):
So cup of Joe. And then there's also the GI Joe
theory. And then there's a theory where
it came from a popular New York coffee shop in New York owned by
Joe Martenson. And so cup of Joe.
But going back, so coffee's a back in battle.
It was pretty big. And you can't really
underestimate what coffee meant to sold.
I mean, there are letters out there of soldiers wishing for
(07:13):
the well-being of Mr. George Washington.
And I get it. I guess when you're stuck in the
trenches with mud, rats, explosions all around you,
sometimes all you have for comfort is this hot drink.
And so since soldiers would see this coffee experience as a
small escape, and since they would experience this regularly,
even though they would still sometimes describe it as
(07:34):
something that didn't taste amazing, it became more than
just a drink. It became a routine and and this
routine became a habit that theybrought home with them when the
war ended. This actually reminds me of the
story of Spam. I made a video about this
before. Most of these soldiers got
introduced to Spam, some of themnot really by choice.
They didn't have a choice but toeat it because that's part of
the rations. And because of this, they got
(07:56):
hooked. And so when the war ended, they
brought home that love of Spam with them.
The same thing happened with George Washington's coffee, but
it didn't quite experience the same success as Spam.
Even though the coffee was something they would take
regularly, there was still so much room for improvement.
Even a lot of people still hatedthe taste, and a lot of them
still preferred having their coffee the usual way.
(08:16):
So the company really wasn't able to sustain their initial
success, and so they would eventually be sold to Wyeth,
which would eventually be acquired by Nestle.
But Nestle acquiring them wasn'thow Nestle got into the instant
coffee game. It was much more difficult than
that. Now while all of that was
happening, while instant coffee was still kind of like this half
baked idea floating around at this point, Nestle still wasn't
(08:38):
doing anything coffee related yet they were mostly known for
milk products and baby food. Nestle started way back in the
1860s when Henry Nestle came up with a milk based product that
became very popular because thatbaby formula actually saved the
life of a premature infant. Now this is good and all but
it's not until 1905 when Nestle merged with Anglo Swiss when
they really started growing intoa global food giant, but still
(09:01):
nothing coffee related. And this brings us to 1929.
This is when the Great Depression happened and it hit
financial markets really hard and it was bad.
Businesses collapsed, people lost their savings overnight and
so many countries got into a lotof financial trouble.
And this brings us to Brazil. Brazil's was and still is the
largest coffee producer in the world and Brazil's economy, it
(09:24):
was very reliant with coffee exports to the United States,
which was its biggest market back then.
It made-up over 50% of all of Brazil's exported goods.
That is a big number. And honestly, it's pretty scary
for a country to do this becauseit means that all their eggs are
in one basket. And I guess it's all fine until
something happens to that basket.
(09:46):
And in this case, the Great Depression happened.
And the Great Depression was pretty much just their worst
nightmare coming to fruition. And so when markets crashed,
exports crashed as well. And since they were exporting
these massive amounts of coffee to the Usus could no longer
afford this. And so suddenly, Brazil found
itself with so much coffee it couldn't sell.
(10:06):
Out of nowhere, there was this huge oversupply of coffee.
And So what happens when there'sso much supply and so little
demand, the price of coffee collapse.
It took a nose dive. It came to a point where the
price of coffee was just 10% of what it cost before the markets
collapse. So that's like you paying 10
pesos for what used to be 100 peso coffee order.
So since there was an oversupply, Brazil was like, OK,
(10:29):
what do we do now? We have so much coffee we can't
sell. We have an oversupply.
How do we stop the oversupply? Prices are going down because we
have too much coffee. What if we just get rid of the
coffee? What if you just burn the
coffee? And that's exactly what they
did. The Brazilian government bought
up all the excess beans and destroyed them just to drive
prices back up. Some were dumped into the ocean,
(10:52):
some were set on fire. It didn't matter.
They just needed to get rid of that.
Between 1931 and 1934, they destroyed over 1/4 of their
coffee supply every year. That's a lot of coffee beans
going to waste. And sadly, even that didn't
work. Prices stayed low, farmers went
bankrupt, and this whole thing became an the most example of
how not to fix your economy. But here's where the story
(11:14):
starts to shift. With all this excess coffee
going to waste, Brazil went desperate.
And so they were looking for a long term solution that could
finally fix all of this. And so they looked into this one
company who was already known for food preservation, a company
that was big enough to handle the scale and volume that Brazil
was dealing with. And that company was Nestle.
And somewhere in their Swiss headquarters was this young food
(11:35):
chemist around this time, he recently just joined the team.
His name was Max Morgan. Now originally Max was brought
in to work on vitamins in dairy products, but in 1932, Nestle
management team gave him a new mission.
We have a lot of coffee, like a lot of coffee, but we don't know
what to do with it. So we need you to turn all that
(11:56):
coffee into powder, Powder that won't expire, at least something
that won't expire for a long time, and most importantly, one
that actually tastes and smells like real coffee.
Some of them have found a way topreserve this thing, but none of
them have figured out how to make it taste good and smell
good. And so Max Morgenthaler
understood the assignment, and he went straight to work.
(12:17):
I know this sounds simple, but at this point, this was
something that no one figured out yet.
All previous attempts had one major flaw, the aroma.
Since all the other attempts resulted in coffee losing its
smell, it just didn't hit right.Once the aroma was gone, it made
everything feel off and the experience just wasn't the same.
So for the next few years, Morgan Tyler and his team kept
(12:38):
grinding away. With all the resources that
Nestle had, they were able to explore so many ways to bring
this to life. They tried different drying
methods. They tried roasting the beans in
different temperatures. They used different techniques
in extracting flavor and aroma, and it just kept going at it.
But in August 1935, after three long years of experiments, there
(12:59):
was still no breakthrough. And so Nestle were like, OK
guys, good job. You know, we gave it everything
we've got, but maybe making thistype of coffee just isn't
possible. And then they pull the plug and
shut the project down. Now, isn't this crazy?
Imagine me company as big as Nestle with all the resources,
with all the talent, expertise and R&D, yet not being able to
(13:22):
solve something like this. This kind of tells us how
challenging it was. I guess for them it felt like we
gave it everything they had. They put in three years of work,
but it probably felt like like it was a dead end.
But here's the crazy part. Even though they shut the
project down, Max Morgenthaler didn't stop working on it.
He knew there was something where he just needed more time.
(13:43):
And so he kept working on it andhe kept going and he would work
on it during his own personal time.
He bought his own coffee beans and he would thinker at home.
And when they would have slow days at the lab in Nestle, they
allowed him to sneak in a few hours to keep testing his
theories. And so he was able to use
Nestle's expensive machines and equipment.
And then in April 1937, Max Morgantyler invited Nestle's
(14:06):
executive ward for a pace test. This was it.
The moment had come. He presented his creation to the
board. And then one sip later, everyone
in the room here, he cracked. As soon as they took that first
sip, they knew because somehow the flavor held and the aroma,
it stayed. And for the first time, instant
coffee actually tasted and smelled like real coffee.
(14:29):
Well, they were taking their coffee.
They gave Max a look and said, you actually did it.
And Max Morgenthaler couldn't beprouder.
This wasn't just big for Max, itwas big for Nestle too, because
it meant that they had a new frontier they could expand
beyond milk. But most importantly for Max, it
was vindicated. And when Nestle filed the
official manufacturing patent, his name was right there in
(14:52):
black and white, credited for being the inventor of this type
of instant coffee, Max Morgan Valor.
After years of work, Max got thecredit he deserved.
It's quite persistent. It paid off, and now Nestle had
something real, an instant coffee product that they can
sell to the world. But you couldn't have a product
without the brand name. And we didn't really overthink
(15:13):
this. They simply were like, you know
what? Having this coffee at home, it's
like having your own mini cafe. And so they just joined the word
Nestle with cafe and that's how we got Nescafe.
Now that they had the product and the brand, the next step was
to test it out because they loved Nescafe, but they weren't
really sure if the rest of the world would as well.
They would do a test run in Switzerland because that's where
(15:35):
their HQ was located. And so in 1937, it finally hit
the shelves. When they were thinking of which
audiences to target, they zeroedin on single men and middle
class housewives, and that because of their instant coffee,
single men can finally make coffee without the help of a
woman. And when it came to the middle
class housewives, their whole idea just revolved around how
(15:55):
women no longer had to worry about making the perfect cup of
coffee when guests would drop by.
And so they would run entire marketing campaigns targeting
these two demographics. They gave free samples to
Mountaineers, yachtmen, Boy Scouts, night workers, basically
anyone who wanted something warmin places where an actual coffee
pot may not exactly be practical.
(16:17):
And it worked because people loved how easy it was, and most
importantly, people actually loved the taste of the coffee.
And because of this, Nestle feltconfident enough about their
product and decided that it was time to launch Nescapee in all
the markets that they were already in globally.
But then war broke out. And not just any war, it was
World War 2. I know that war isn't something
(16:38):
to get excited about, but while everyone else was dreading what
this conflict was going to bring, Nestle had its eyes on
one thing. And that was to be part of the
rations that's going to fuel thearmies heading to war.
But the difference between this and World War One was the scale
of this was just unheard of. Armies were much bigger, so much
more manpower was involved. And so these vast war machines
(17:01):
needed more rations, more food for their men, and of course,
more coffee. In World War One, like we talked
about earlier, we talked about how George Washington's coffee
had a near monopoly in supplyingarmies with their coffee.
But in World War Two, it was just on a different level.
There was no one company that could single handedly supply
coffee for all these armies, andso they brought in several
(17:24):
companies and combined their entire production capacity so
that they could supply the sheernumber of men who needed
rations. In one year alone, the US
military bought over 1,000,000 cases of coffee from Nescafee.
And just to give you an idea of how big an order that was, that
was every single can of coffee that Nestle's US factory could
produce that year. In fact, we had nothing left for
(17:46):
civilians. Nescafe wasn't just a drink
anymore, it was fuel for the wareffort.
Being a part of the war rations was incredibly important for
Nescafe because for them this was their battlefield.
They were very much aware that they had the opportunity to get
10s of millions of army men to try their products.
This was a built in audience of caffeine deprived soldiers and
(18:06):
these soldiers would have this coffee every day for years and
it would become their routine and they knew that these
soldiers would eventually returnhome and they would bring their
love of their their coffee home with them.
We allies didn't only win, the escafe won as well.
By the time the war ended and 10s of millions returned to
civilian life, the troops didn'tjust remember the taste, they
(18:27):
relied on it. They needed it.
They went back to their families, their jobs, their old
lives. But something changed.
Now they wanted the coffee that they've gotten used to.
They couldn't go back because they wanted Nescafe now.
And because of this, Nescafe's expansion was spread and sales
started going crazy all over theworld.
Eventually, it made its way herein the Nestle products were
(18:47):
actually already available here in the Philippines as early as
1895, but it wasn't until 1911 when they would put up their
first sales office here in Binondo.
In 1916, Nestle partnered up with the San Miguel Corporation
and in 1962, that's when they would put up their own factor
here to produce not only Nescafebut also Nestle's other
products. This is pretty common for
(19:08):
multinational brands where they would have a product and they
would partner up with a capable local company to produce and
distribute these products. But here's a As remarkable as
Nescafe's instant coffee story was, when Nescafe arrived here
in the Philippines, it wasn't actually the first instant
coffee brand to pop up here. There were already other
players. Cafe Puro, which was introduced
(19:28):
in 1952, was already known as the first instant coffee brand
in Asia, and they were the leading brand of coffee here in
the Philippines. One year after Nescafe's factory
was set up here, Universal Robina, or URC, owned by the
Gotham Waste, took a look at themarket and realized Cafe Puro
has a great lead. But I think we have what it
takes to challenge them. And so URC launched Blend 45.
(19:50):
They called it Blend 45 because they said that each cup
contained 45 choice coffee beans.
And so at one point, it was a battle between Nescafe Cafe Puro
and Blend 45, the leading brand.Cafe Puro used their lead to
solidify the message that their coffee was the one with a rich
coffee flavor and the fresh coffee aroma.
And they kept hammering the whole 100% pure coffee idea.
(20:14):
I mean, it's even there in theirbrand name and.
Cafe Poodle Blend 45 was the onehinging on price.
It was the cheapest option available.
But despite this, and despite the price, it was still pretty
good instant coffee. But because of their pricing
strategy, they were the ones that were labeled as the Pinoy
coffee. And love it or hate it, in this
game, competing on price is still a very effective way to
(20:34):
get market share. In fact, two years after its
launch, Blend 45 took the lead from Cafe Poodle.
It was also interesting to know some of the tactics that some of
these brands were using back then.
Like Cafe Poodle had this strategy where they packaged
their coffee and these glass jars which had plastic caps.
And what people would do was that once they were done with
their coffee, they would use these glass jars as drinking
(20:56):
glasses at home. And just like that, you now had
an extra glass that you could use day-to-day.
And this was so successful that they would even introduce entire
collections. And so they would have these
collections where each glass haddifferent designs which made you
wanna get the entire set. And there were also collections
where they would have these different colors.
I think they call it the RainbowCollection.
(21:16):
Yeah. It was one way to get people
excited about buying more. Blen 45 would eventually have
their version of this, and even Nescafe followed suit.
What's funny to me is that whilereading about this, I was like,
OK, so this strategy was something they did in the past,
but then I remembered the Nescafe still does this.
Like, I know that we have a couple of Nescafe bugs at home
that came for free. And it's pretty smart if you
(21:37):
think about it, because not onlywill you get excited to choose
this brand which offered the bugor the glass jar that you want,
then once you have that bug withyou at home with Nescafe's logo,
you can basically put any brand of coffee in it and it would
still look like it's from Nescafe.
It's free advertising for them. But now let's talk about
positioning. Because around this time, Cafe
(21:58):
Puto has pretty much owned the whole 100% fewer coffee with a
fresh coffee aroma position. And Blen 45 was positioning
itself as the cheapest possible coffee you can get and the whole
Pinoy coffee angle. And so Nescafe had to figure out
what positioning it had to go for.
And so Nescafe was like where aninternational brand, we are
(22:18):
present in so many countries allover the world.
What narrative do we tell? They needed more info.
And so they went to the streets,they started talking to people.
They wanted to know more about how people took their coffee,
their habits, what they thought about Nescafe.
And one thing that stood out wasthat they kept associating
Nescafe as something that was important.
It wasn't the main thing, but that kind of was a recurring
(22:41):
theme that people would bring up.
They would say that it was something that they were willing
to try just because it came fromoverseas, that it was an
international product. Like without explicitly saying
it, we are drawn through the face of the Western world and
they saw that. They saw that even though we had
our own ways, we were more likely to try new things if they
were from far and Western countries.
(23:02):
And so Nescafe looked at this and thought, if people see us as
this high quality imported brand, why don't we just lean
into that? Why not position Nescafe as this
modern Western way of drinking coffee during a time when
Filipinos were still used to whatever was available in the
local market? So Nescafe understood that
early. They didn't even have to fight
against our existing coffee culture because they knew that
(23:24):
the Western products carry this built in trust and they realized
they had a unique position to take advantage of this.
And so they doubled down on thatpositioning.
When you look at their ads, you wouldn't think that these were
ads for the Philippine market because they were using
foreigners, their ads and you would see these ads feature
places from Europe and the United States.
I mean, nowadays when you're making ads, you try to at least
(23:46):
look for Filipino looking modelsso that they look relatable.
But that time Nescafe was intentionally choosing non
Filipino models on their ads instead of trying to beat blend
45-ON price. Nescafe double down on that
whole international image. We wanted to paint this image
that Nescafe was the coffee thatpeople drank in the great cities
of the world. That was the new other campaign,
(24:07):
the great so the World campaign,which ran in the 1970s.
So they would get clips of people drinking coffee in the
streets of Japan, in Madrid, in France, end it with a scene in
Manila with our own local version.
And the message was simple. The same coffee that they're
drinking. It's now available here.
For Filipino viewers in the 70s and 80s, this ad hit their
friends like, you're not just drinking local instant coffee,
(24:30):
you're connected to something bigger.
It's like Nescafe was saying, hey, see these people in these
foreign countries enjoying your coffee, You're now part of this
world too. And this strategy worked so well
that they kept evolving it. And it started to work because
Filipinos started seeing Nescafeas international.
And after they nailed the message, they just needed to
broadcast it to the entire country.
Luckily, when you're backed by the world's largest food and
(24:52):
beverage company, it means you have a multibillion dollar
machine behind you. And so when it came to
advertising, Nestle doesn't really hold back.
In 2001, they poured $30 millioninto a single global Nescafe
campaign. By 2009, that had nearly doubled
to $55.9 million. And last year, we don't have the
numbers for Nescafe specifically, but Nestle as a
(25:13):
whole spent more than 8% of its total sales on advertising and
marketing. And that's coming from a company
that had sales of over $104 billion in 2024.
With a budget that massive, Nestle can pretty much blanket
TV screens, radios, buses, billboards, and today, every
social feed you scroll through, once you nail the message, it's
(25:33):
really just a matter of volume and consistency.
And over time, that's how Nescafe made itself into the
default choice. But Nescafe wasn't done
building. By the 1960s, most of the world
has recovered from World War 2. Economy stabilized, middle
classes grew, and for the first time in decades, people could
now afford more than just the basics.
And Nescafe saw that people started wanting these little
(25:55):
luxuries. It wasn't that people were
looking for something extravagant, it's just that they
wanted to make the day-to-day just a little bit more elevated.
And that's where Nescafe Gold comes in.
It looked richer, it smelled fresher, and it came a gold
packaging that signaled the premium quality.
This wasn't just another instantcoffee, it was marketed as the
upgrade. But here's why Nescafe did it.
(26:15):
It wasn't just about improving the product, it was about
capturing in different market segments.
Nestle knew that there were consumers who were slowly
outgrowing basic instant coffee and others were starting to
slowly embrace the new cafe culture.
And so they just saw that there was this growing group of people
that saw that instant coffee wasno longer enough.
And so without a premium option,Nescafe is losing them.
(26:38):
And that's why they launched Nescafe Gold.
This solved that problem by giving these consumers a reason
to stay inside the brand. Despite this, in the 1980s, a
new challenge was rising. As I mentioned, cafe culture was
spreading. People weren't just drinking
their coffees anymore, they weregoing for the experience of the
cafe. It was a bit of a shift as to
how people saw coffee. So once again, Nestle and
(26:59):
Nescafe had a choice. Do they just allow people to
graduate out of instant coffee entirely, or do they try to
figure out and give them a weight to have that Cafe
experience at home? And that's how they ended up
making Nespresso. What's interesting about
Nespresso is that the people wholove it don't just drink coffee.
They enjoy the tiny ritual that comes with it.
Like, there's something almost ceremonial about it, starting
(27:21):
from that neat little parade of metallic pods lined up on a
rack, color-coded, organized, and displayed like a collection.
For a lot of Nespresso users, the machine became a centerpiece
in their kitchen. It's the appliance they're proud
to show off. Because quite honestly, it's a
beautiful machine. It's sleek, it's modern.
It tells people who visit your home that you take your coffee
(27:43):
seriously, but not in a complicated way.
And that's why Nespresso works. It sells convenience, but
wrapped in ritual. It sells simplicity, but wrapped
in style. It sells coffee, but really, it
sells identity. Nespresso was aspirational, but
it was also expensive. Nestle introduced another year
Dolce Gusto. It's the same pod system, but
(28:04):
more playful, more colorful, more versatile.
They did this because the dangerfor Nestle was obvious.
If people kept obligating their taste outside of home, they
might eventually leave instant coffee behind.
Nespresso and Dolce Gusto ensured that as people's taste
evolved, they stayed within Nespresso's ecosystem.
But if Nespresso and Dolce Gustowas solving the At Home Cafe
(28:26):
experience, there was still one more challenge.
People were falling in love withbrands.
Not just the coffee, but the identity behind the coffee they
drank. And at that time, no brand had a
heavier emotional pull. That's Starbucks.
So instead of trying to out Starbucks, Starbucks Nescafe did
something smarter. In 2018, Nestle struck a $7
(28:46):
billion deal to create the Starbucks at Home 9.
This gave them their rights to sell.
Starbucks means instant mixes and pods and supermarkets.
It was a simple idea. Why fight for a category that
Starbucks already owned when youcould partner with them and
bring the brand straight into people's kitchens?
And honestly, the deal just madeas much sense to Starbucks as it
did for Nestle. Starbucks was never built for
(29:08):
the grocery aisle. Their strength was in the in
store experience. The smell, the ambiance, the
barista calling your name wrong.We didn't have decades of know
how in making products specifically designed for at
home brewing, and Nestle did. So instead of competing with
Nescafe in a space where Starbucks was weak, Starbucks
got to partner with a giant who already mastered that entire
(29:31):
world. Nestle had handled everything
from formulation to packaging tologistics, while Starbucks
simply let the power of its brand.
It was the easiest way for Starbucks to enter millions of
home without needing to build anentire division from scratch.
And Nescafe benefited as well. Instead of seeing Starbucks as a
threat that's pulling people away from instant coffee at
home, they turn that threat intoa revenue stream.
(29:54):
Starbucks expanded its reach beyond physical stores, and
Nestle expanded its coffee empire with one of the most
beloved brands on the planet. But if Starbucks represented the
mainstream coffee crowd, Nestle also move on the extreme end of
the coffee universe. They acquired a stake in Blue
Bottle Coffee, one of the most respected names in 3rd wave.
Now if you're not familiar, 3rd wave is basically a movement
(30:15):
where they treat coffee like a craft.
They focus on single origins, artisanal roasting, ethical
sourcing. They're basically on the
opposite end of mass production.And one of the best brands in
3rd wave at that time was a bluebottle.
And Blue bottle was everything in escapee wasn't.
But that was exactly the point. And one of the reasons why Blue
Bottle meant so much was becauseof the type of crowd that it
(30:38):
attracted. Blue Bottle didn't have
customers, they had super fans. And Blue Bottle built all that
trust by being uncompromising. They were the type where every
detail was very deliberate and intentional.
And that level of commitment created this brand that money
can't buy. Nestle understood the value of
that. Blue Bottle wasn't just another
cafe chain, it was a cultural signal.
(30:59):
By investing in it, Nestle tapped into a group of consumers
who would never go near instant coffee, but who still influenced
how the world talked about coffee.
Nestle knew that they couldn't manufacture that kind of
authenticity. So instead of building an
artisanal brand from scratch, they invested in Blue Bottle and
gained credibility in a segment that would never reach for Nest
(31:20):
Cafe. And now you start to see the
whole picture. The Starbucks partnership
attracted the everyday coffee lover.
The Blue Bottle investment gave them credibility with the
purists. Together, those two moves
covered both ends of the cultural spectrum, even if
specialty coffee stayed small. With this move, Nestle hedged
its bet. And if things did well and 3rd
Wave took over, well, Nestle already had its foot in the
(31:41):
door. And with that, Leslie closed the
last major gaps in their coffee empire.
So when you zoom out, you start to see the real picture.
Nestle didn't just sell in some coffee, it built an empire, a
ladder, a complete coffee ecosystem that met people at
every stage of their taste. From the budget instant coffee
sachets we all grew up with, to the Cafe style pod machines in
(32:01):
espresso and Dolce Gusto, to Starbucks on supermarket
shelves, all the way to the Third Wave crowd through Blue
Bottle. No matter where global coffee
culture move, Nestle already hada bet there.
And that's how Nescafe held the throne for decades.
It was all about adaptability. Whenever the world changed its
relationship with coffee, Nescafe found a way to stay in
the conversation. That's how they built their
(32:23):
lead. But here's a twist.
In the Philippines, that lead didn't last forever.
Because somewhere in Indonesia, a smaller, hungrier competitor
was watching a brand that didn'thave Nestle's money, Nestle's
power, or Nestle's global dominance.
And so they tired heavily on outsmarting the global coffee
giant, and they doubled down on figuring out a flavor profile
that didn't come from Switzerland, but from Southeast
(32:45):
Asia itself. That brand was Gopico.
And that's what we're going to talk about in the next episode.
And that's it. Now you know about the brand
origin story of Nescafe. If you want to sponsor an
episode or if you want to be featured, the links are in the
description. My website's right there.
Just message me and then we can work something out.
You can also follow me on Instagram and Tiktok.
I have shorter clips there. My name is Chris.
(33:06):
I'll see you in the next one.
This is Nescafe in the Philippines.
It's hard not to see Nescafe everywhere.
And I'm not sure about you, but I used to think that Nescafe
invented instant coffee. But once again, I was wrong.
They didn't invent instant coffee.
It's a coffee was already aroundfor years before Nescafe came
in. But because of Nescafe, it's
everywhere. And when Nescafe arrived here in
the Philippines, they dominated.Although there were other
(00:21):
players since Nescafe's a part of Nestle, they simply outgunned
everyone. But there was 1 grand that
became a surprising challenger and they actually meet Nescafe
in a particular category. That brand is Copico.
Now this is a 2 parter video. OK.
In this video, I'm going to talkabout the crazy history of
instant coffee and the origins of Nescafe and how difficult it
(00:41):
was to create the perfect instant coffee that even Nestle
almost gave up. It just so happened that there
was this one scientist who kept working on it even though the
project was shut down. And in the next video, I'm going
to talk about the origin story of Copico and how they took the
lead from Nescafe here in the Philippines.
My name is Chris. Welcome to brand.
(01:06):
This episode was made possible by the sauce.
This sauce is the only news pagethat I can actually keep up in
because honestly, I don't reallyhave the time to consume these
long news reports. But I still want to get updated.
And that's why I like the sauce because they make this easy to
consume with their visuals that are clear, short and straight to
the point. And I can stay updated without
(01:27):
leaving Instagram. It's bite sized news that cuts
through all the noise so follow them.
It's at the sauce dot pH on Instagram.
The links are in the description.
You know when I was a kid when the word coffee was mentioned to
me, it meant Nescafe. That's what coffee meant to me
because that's what my parents had at home.
Starbucks coffee runs weren't a thing yet, at least not here in
(01:48):
ELO ELO. Or at least that's not what my
family did here. I would see my parents take
their coffee and it seems like all they needed was hot water,
sugar, and a pack of Nescafe. Like, that's it.
That's the coffee coffee experience.
And I think for most Filipinos that time, that's what coffee
meant for them too. Back then, coffee was simpler
because it had to be. I mean, sure, espresso machines
(02:09):
and coffee makers, they were already around that time, but
they weren't as accessible or affordable as they are today.
And we also didn't have YouTube to teach us all about the
nuances of making great coffee at home.
So we learned to love what we had.
All we had was hot water, sugar,Creamer and Nescafe.
Because if you wanted coffee in the morning, Nescafe was it.
And so it made me wonder why. Why is Nescafe the biggest brand
(02:31):
of instant coffee, not only herein the Philippines, but in so
many countries around the world?Did they invent instant coffee?
Well, no, because way before Nestle came into the picture,
there were already several attempts to make coffee more
convenient. The first version of instant
coffee came from the UK in 1771.Back then they referred to it
simply as coffee compound. I don't know exactly how it
(02:53):
tasted like, but I can imagine that it wasn't great.
In 1851, during the Civil War, Americans came up with their own
version of and coffee. They referred to it simply as
coffee cakes. It wasn't anything fancy, but
when soldiers were sent out to war when they were in the middle
of the battlefield, far from home in freezing temperatures,
having something warm to drink, even if it tasted so bad, it was
(03:14):
more than enough. They could turn a blind eye on
the face if it meant that even just for a moment, they could
stay warm and feel mentally alert.
Even though these coffee cakes tasted so bad, it did the job.
Now let's Fast forward 39 years later.
In 1890, there was this guy fromhis name was David Strang.
David Strang was trying to create a better way of making
(03:34):
instant coffee. And so he came up with this
method called as the dry hot airmethod.
And he patented this and this might actually be considered as
the world's first proper instantcoffee.
And what I mean proper, I'm not saying that it tastes great.
I'm just saying that it probablytastes so much better than the
horrible tasting coffee cakes. Eleven years after David Strang
version of instant coffee, therewas Satori Caro.
(03:56):
Satori Caro was a Japanese American chemist based in
Chicago. He created a more stable and
more enjoyable version of instant coffee.
He got it patented in 1903 and he even showed it off the Pan
American Exposition. And so for a while, people
actually thought that Satori Cairo invented instant coffee
until they discovered that DavidShang from New Zealand had
patented a version of instant coffee 11 years earlier.
(04:19):
Now, these attempts in making instant coffee, these were good
starting points, but they weren't good enough yet to
commercially mass produce. And there weren't any brands yet
that felt confident enough that it was good enough and good
tasting enough for people to want to buy.
But all of that changed when this guy came along.
His name was George Washington. This isn't the George Washington
(04:41):
you have in your mind. OK?
This George Washington was a Belgian American inventor.
And one time while he was in Guatemala, while waiting for his
coffee to be ready, he found himself noticing the dried
coffee residue forming on this silver pot of coffee.
And although it's something thateveryone else has before and is
honestly nothing extraordinary, for George Washington, it's like
(05:05):
a lightning bolt snapped an ideain his mind because he was
looking at this and he was like,I think there's something here.
I mean, we can do something withthis.
It was his Eureka moment. He rushed back to his kitchen
and got to work. And after several rounds of
trial and error, he came up witha new way to make instant
coffee. This led to the creation of
Ready coffee. Ready coffee is considered as
(05:27):
the first mass produced instant coffee in the US.
So George Washington launched the company and he was working
on figuring out how to get readycoffee all over the US.
And the timing couldn't be more perfect because around this
time, World War 2 happened. Since George Washington's
coffee, it was considered ahead of its time.
Back then, the US military choseGeorge Washington's company as
(05:48):
the main supplier of coffee, andthey made it a part of the
rations. And these are mostly staples
that are prepackaged, such as canned meat, biscuits.
And in this case, it now included George Washington's
coffee. The Canadian Expeditionary Force
made it a part of their rations in 1914, followed by the
American Expeditionary Force when they finally entered the
war in 1917. Eventually, this would all be be
(06:10):
allocated to the US military because of their incredible
demand for coffee, which at the final stage of the war was
around six times the national supply.
Oh, here's something interesting.
So you know how people call a cup of coffee cup of Joe?
So, well, there's a theory that it actually started with George
Washington's coffee. They say that back then,
soldiers would refer to their coffee as cup of George, since
(06:31):
it's from George Washington's coffee.
And over time, they say that George got shortened to Joe.
So instead of cup of George, it's just now a cup of Joe.
Some say that it came from a time when the US Navy banned
alcohol on their ships. And so since there was no
alcohol, they had to make do with coffee.
And then they started associating coffee as being the
drink of the common man or the average Joe.
(06:52):
So cup of Joe. And then there's also the GI Joe
theory. And then there's a theory where
it came from a popular New York coffee shop in New York owned by
Joe Martenson. And so cup of Joe.
But going back, so coffee's a back in battle.
It was pretty big. And you can't really
underestimate what coffee meant to sold.
I mean, there are letters out there of soldiers wishing for
(07:13):
the well-being of Mr. George Washington.
And I get it. I guess when you're stuck in the
trenches with mud, rats, explosions all around you,
sometimes all you have for comfort is this hot drink.
And so since soldiers would see this coffee experience as a
small escape, and since they would experience this regularly,
even though they would still sometimes describe it as
(07:34):
something that didn't taste amazing, it became more than
just a drink. It became a routine and and this
routine became a habit that theybrought home with them when the
war ended. This actually reminds me of the
story of Spam. I made a video about this
before. Most of these soldiers got
introduced to Spam, some of themnot really by choice.
They didn't have a choice but toeat it because that's part of
the rations. And because of this, they got
(07:56):
hooked. And so when the war ended, they
brought home that love of Spam with them.
The same thing happened with George Washington's coffee, but
it didn't quite experience the same success as Spam.
Even though the coffee was something they would take
regularly, there was still so much room for improvement.
Even a lot of people still hatedthe taste, and a lot of them
still preferred having their coffee the usual way.
(08:16):
So the company really wasn't able to sustain their initial
success, and so they would eventually be sold to Wyeth,
which would eventually be acquired by Nestle.
But Nestle acquiring them wasn'thow Nestle got into the instant
coffee game. It was much more difficult than
that. Now while all of that was
happening, while instant coffee was still kind of like this half
baked idea floating around at this point, Nestle still wasn't
(08:38):
doing anything coffee related yet they were mostly known for
milk products and baby food. Nestle started way back in the
1860s when Henry Nestle came up with a milk based product that
became very popular because thatbaby formula actually saved the
life of a premature infant. Now this is good and all but
it's not until 1905 when Nestle merged with Anglo Swiss when
they really started growing intoa global food giant, but still
(09:01):
nothing coffee related. And this brings us to 1929.
This is when the Great Depression happened and it hit
financial markets really hard and it was bad.
Businesses collapsed, people lost their savings overnight and
so many countries got into a lotof financial trouble.
And this brings us to Brazil. Brazil's was and still is the
largest coffee producer in the world and Brazil's economy, it
(09:24):
was very reliant with coffee exports to the United States,
which was its biggest market back then.
It made-up over 50% of all of Brazil's exported goods.
That is a big number. And honestly, it's pretty scary
for a country to do this becauseit means that all their eggs are
in one basket. And I guess it's all fine until
something happens to that basket.
(09:46):
And in this case, the Great Depression happened.
And the Great Depression was pretty much just their worst
nightmare coming to fruition. And so when markets crashed,
exports crashed as well. And since they were exporting
these massive amounts of coffee to the Usus could no longer
afford this. And so suddenly, Brazil found
itself with so much coffee it couldn't sell.
(10:06):
Out of nowhere, there was this huge oversupply of coffee.
And So what happens when there'sso much supply and so little
demand, the price of coffee collapse.
It took a nose dive. It came to a point where the
price of coffee was just 10% of what it cost before the markets
collapse. So that's like you paying 10
pesos for what used to be 100 peso coffee order.
So since there was an oversupply, Brazil was like, OK,
(10:29):
what do we do now? We have so much coffee we can't
sell. We have an oversupply.
How do we stop the oversupply? Prices are going down because we
have too much coffee. What if we just get rid of the
coffee? What if you just burn the
coffee? And that's exactly what they
did. The Brazilian government bought
up all the excess beans and destroyed them just to drive
prices back up. Some were dumped into the ocean,
(10:52):
some were set on fire. It didn't matter.
They just needed to get rid of that.
Between 1931 and 1934, they destroyed over 1/4 of their
coffee supply every year. That's a lot of coffee beans
going to waste. And sadly, even that didn't
work. Prices stayed low, farmers went
bankrupt, and this whole thing became an the most example of
how not to fix your economy. But here's where the story
(11:14):
starts to shift. With all this excess coffee
going to waste, Brazil went desperate.
And so they were looking for a long term solution that could
finally fix all of this. And so they looked into this one
company who was already known for food preservation, a company
that was big enough to handle the scale and volume that Brazil
was dealing with. And that company was Nestle.
And somewhere in their Swiss headquarters was this young food
(11:35):
chemist around this time, he recently just joined the team.
His name was Max Morgan. Now originally Max was brought
in to work on vitamins in dairy products, but in 1932, Nestle
management team gave him a new mission.
We have a lot of coffee, like a lot of coffee, but we don't know
what to do with it. So we need you to turn all that
(11:56):
coffee into powder, Powder that won't expire, at least something
that won't expire for a long time, and most importantly, one
that actually tastes and smells like real coffee.
Some of them have found a way topreserve this thing, but none of
them have figured out how to make it taste good and smell
good. And so Max Morgenthaler
understood the assignment, and he went straight to work.
(12:17):
I know this sounds simple, but at this point, this was
something that no one figured out yet.
All previous attempts had one major flaw, the aroma.
Since all the other attempts resulted in coffee losing its
smell, it just didn't hit right.Once the aroma was gone, it made
everything feel off and the experience just wasn't the same.
So for the next few years, Morgan Tyler and his team kept
(12:38):
grinding away. With all the resources that
Nestle had, they were able to explore so many ways to bring
this to life. They tried different drying
methods. They tried roasting the beans in
different temperatures. They used different techniques
in extracting flavor and aroma, and it just kept going at it.
But in August 1935, after three long years of experiments, there
(12:59):
was still no breakthrough. And so Nestle were like, OK
guys, good job. You know, we gave it everything
we've got, but maybe making thistype of coffee just isn't
possible. And then they pull the plug and
shut the project down. Now, isn't this crazy?
Imagine me company as big as Nestle with all the resources,
with all the talent, expertise and R&D, yet not being able to
(13:22):
solve something like this. This kind of tells us how
challenging it was. I guess for them it felt like we
gave it everything they had. They put in three years of work,
but it probably felt like like it was a dead end.
But here's the crazy part. Even though they shut the
project down, Max Morgenthaler didn't stop working on it.
He knew there was something where he just needed more time.
(13:43):
And so he kept working on it andhe kept going and he would work
on it during his own personal time.
He bought his own coffee beans and he would thinker at home.
And when they would have slow days at the lab in Nestle, they
allowed him to sneak in a few hours to keep testing his
theories. And so he was able to use
Nestle's expensive machines and equipment.
And then in April 1937, Max Morgantyler invited Nestle's
(14:06):
executive ward for a pace test. This was it.
The moment had come. He presented his creation to the
board. And then one sip later, everyone
in the room here, he cracked. As soon as they took that first
sip, they knew because somehow the flavor held and the aroma,
it stayed. And for the first time, instant
coffee actually tasted and smelled like real coffee.
(14:29):
Well, they were taking their coffee.
They gave Max a look and said, you actually did it.
And Max Morgenthaler couldn't beprouder.
This wasn't just big for Max, itwas big for Nestle too, because
it meant that they had a new frontier they could expand
beyond milk. But most importantly for Max, it
was vindicated. And when Nestle filed the
official manufacturing patent, his name was right there in
(14:52):
black and white, credited for being the inventor of this type
of instant coffee, Max Morgan Valor.
After years of work, Max got thecredit he deserved.
It's quite persistent. It paid off, and now Nestle had
something real, an instant coffee product that they can
sell to the world. But you couldn't have a product
without the brand name. And we didn't really overthink
(15:13):
this. They simply were like, you know
what? Having this coffee at home, it's
like having your own mini cafe. And so they just joined the word
Nestle with cafe and that's how we got Nescafe.
Now that they had the product and the brand, the next step was
to test it out because they loved Nescafe, but they weren't
really sure if the rest of the world would as well.
They would do a test run in Switzerland because that's where
(15:35):
their HQ was located. And so in 1937, it finally hit
the shelves. When they were thinking of which
audiences to target, they zeroedin on single men and middle
class housewives, and that because of their instant coffee,
single men can finally make coffee without the help of a
woman. And when it came to the middle
class housewives, their whole idea just revolved around how
(15:55):
women no longer had to worry about making the perfect cup of
coffee when guests would drop by.
And so they would run entire marketing campaigns targeting
these two demographics. They gave free samples to
Mountaineers, yachtmen, Boy Scouts, night workers, basically
anyone who wanted something warmin places where an actual coffee
pot may not exactly be practical.
(16:17):
And it worked because people loved how easy it was, and most
importantly, people actually loved the taste of the coffee.
And because of this, Nestle feltconfident enough about their
product and decided that it was time to launch Nescapee in all
the markets that they were already in globally.
But then war broke out. And not just any war, it was
World War 2. I know that war isn't something
(16:38):
to get excited about, but while everyone else was dreading what
this conflict was going to bring, Nestle had its eyes on
one thing. And that was to be part of the
rations that's going to fuel thearmies heading to war.
But the difference between this and World War One was the scale
of this was just unheard of. Armies were much bigger, so much
more manpower was involved. And so these vast war machines
(17:01):
needed more rations, more food for their men, and of course,
more coffee. In World War One, like we talked
about earlier, we talked about how George Washington's coffee
had a near monopoly in supplyingarmies with their coffee.
But in World War Two, it was just on a different level.
There was no one company that could single handedly supply
coffee for all these armies, andso they brought in several
(17:24):
companies and combined their entire production capacity so
that they could supply the sheernumber of men who needed
rations. In one year alone, the US
military bought over 1,000,000 cases of coffee from Nescafee.
And just to give you an idea of how big an order that was, that
was every single can of coffee that Nestle's US factory could
produce that year. In fact, we had nothing left for
(17:46):
civilians. Nescafe wasn't just a drink
anymore, it was fuel for the wareffort.
Being a part of the war rations was incredibly important for
Nescafe because for them this was their battlefield.
They were very much aware that they had the opportunity to get
10s of millions of army men to try their products.
This was a built in audience of caffeine deprived soldiers and
(18:06):
these soldiers would have this coffee every day for years and
it would become their routine and they knew that these
soldiers would eventually returnhome and they would bring their
love of their their coffee home with them.
We allies didn't only win, the escafe won as well.
By the time the war ended and 10s of millions returned to
civilian life, the troops didn'tjust remember the taste, they
(18:27):
relied on it. They needed it.
They went back to their families, their jobs, their old
lives. But something changed.
Now they wanted the coffee that they've gotten used to.
They couldn't go back because they wanted Nescafe now.
And because of this, Nescafe's expansion was spread and sales
started going crazy all over theworld.
Eventually, it made its way herein the Nestle products were
(18:47):
actually already available here in the Philippines as early as
1895, but it wasn't until 1911 when they would put up their
first sales office here in Binondo.
In 1916, Nestle partnered up with the San Miguel Corporation
and in 1962, that's when they would put up their own factor
here to produce not only Nescafebut also Nestle's other
products. This is pretty common for
(19:08):
multinational brands where they would have a product and they
would partner up with a capable local company to produce and
distribute these products. But here's a As remarkable as
Nescafe's instant coffee story was, when Nescafe arrived here
in the Philippines, it wasn't actually the first instant
coffee brand to pop up here. There were already other
players. Cafe Puro, which was introduced
(19:28):
in 1952, was already known as the first instant coffee brand
in Asia, and they were the leading brand of coffee here in
the Philippines. One year after Nescafe's factory
was set up here, Universal Robina, or URC, owned by the
Gotham Waste, took a look at themarket and realized Cafe Puro
has a great lead. But I think we have what it
takes to challenge them. And so URC launched Blend 45.
(19:50):
They called it Blend 45 because they said that each cup
contained 45 choice coffee beans.
And so at one point, it was a battle between Nescafe Cafe Puro
and Blend 45, the leading brand.Cafe Puro used their lead to
solidify the message that their coffee was the one with a rich
coffee flavor and the fresh coffee aroma.
And they kept hammering the whole 100% pure coffee idea.
(20:14):
I mean, it's even there in theirbrand name and.
Cafe Poodle Blend 45 was the onehinging on price.
It was the cheapest option available.
But despite this, and despite the price, it was still pretty
good instant coffee. But because of their pricing
strategy, they were the ones that were labeled as the Pinoy
coffee. And love it or hate it, in this
game, competing on price is still a very effective way to
(20:34):
get market share. In fact, two years after its
launch, Blend 45 took the lead from Cafe Poodle.
It was also interesting to know some of the tactics that some of
these brands were using back then.
Like Cafe Poodle had this strategy where they packaged
their coffee and these glass jars which had plastic caps.
And what people would do was that once they were done with
their coffee, they would use these glass jars as drinking
(20:56):
glasses at home. And just like that, you now had
an extra glass that you could use day-to-day.
And this was so successful that they would even introduce entire
collections. And so they would have these
collections where each glass haddifferent designs which made you
wanna get the entire set. And there were also collections
where they would have these different colors.
I think they call it the RainbowCollection.
(21:16):
Yeah. It was one way to get people
excited about buying more. Blen 45 would eventually have
their version of this, and even Nescafe followed suit.
What's funny to me is that whilereading about this, I was like,
OK, so this strategy was something they did in the past,
but then I remembered the Nescafe still does this.
Like, I know that we have a couple of Nescafe bugs at home
that came for free. And it's pretty smart if you
(21:37):
think about it, because not onlywill you get excited to choose
this brand which offered the bugor the glass jar that you want,
then once you have that bug withyou at home with Nescafe's logo,
you can basically put any brand of coffee in it and it would
still look like it's from Nescafe.
It's free advertising for them. But now let's talk about
positioning. Because around this time, Cafe
(21:58):
Puto has pretty much owned the whole 100% fewer coffee with a
fresh coffee aroma position. And Blen 45 was positioning
itself as the cheapest possible coffee you can get and the whole
Pinoy coffee angle. And so Nescafe had to figure out
what positioning it had to go for.
And so Nescafe was like where aninternational brand, we are
(22:18):
present in so many countries allover the world.
What narrative do we tell? They needed more info.
And so they went to the streets,they started talking to people.
They wanted to know more about how people took their coffee,
their habits, what they thought about Nescafe.
And one thing that stood out wasthat they kept associating
Nescafe as something that was important.
It wasn't the main thing, but that kind of was a recurring
(22:41):
theme that people would bring up.
They would say that it was something that they were willing
to try just because it came fromoverseas, that it was an
international product. Like without explicitly saying
it, we are drawn through the face of the Western world and
they saw that. They saw that even though we had
our own ways, we were more likely to try new things if they
were from far and Western countries.
(23:02):
And so Nescafe looked at this and thought, if people see us as
this high quality imported brand, why don't we just lean
into that? Why not position Nescafe as this
modern Western way of drinking coffee during a time when
Filipinos were still used to whatever was available in the
local market? So Nescafe understood that
early. They didn't even have to fight
against our existing coffee culture because they knew that
(23:24):
the Western products carry this built in trust and they realized
they had a unique position to take advantage of this.
And so they doubled down on thatpositioning.
When you look at their ads, you wouldn't think that these were
ads for the Philippine market because they were using
foreigners, their ads and you would see these ads feature
places from Europe and the United States.
I mean, nowadays when you're making ads, you try to at least
(23:46):
look for Filipino looking modelsso that they look relatable.
But that time Nescafe was intentionally choosing non
Filipino models on their ads instead of trying to beat blend
45-ON price. Nescafe double down on that
whole international image. We wanted to paint this image
that Nescafe was the coffee thatpeople drank in the great cities
of the world. That was the new other campaign,
(24:07):
the great so the World campaign,which ran in the 1970s.
So they would get clips of people drinking coffee in the
streets of Japan, in Madrid, in France, end it with a scene in
Manila with our own local version.
And the message was simple. The same coffee that they're
drinking. It's now available here.
For Filipino viewers in the 70s and 80s, this ad hit their
friends like, you're not just drinking local instant coffee,
(24:30):
you're connected to something bigger.
It's like Nescafe was saying, hey, see these people in these
foreign countries enjoying your coffee, You're now part of this
world too. And this strategy worked so well
that they kept evolving it. And it started to work because
Filipinos started seeing Nescafeas international.
And after they nailed the message, they just needed to
broadcast it to the entire country.
Luckily, when you're backed by the world's largest food and
(24:52):
beverage company, it means you have a multibillion dollar
machine behind you. And so when it came to
advertising, Nestle doesn't really hold back.
In 2001, they poured $30 millioninto a single global Nescafe
campaign. By 2009, that had nearly doubled
to $55.9 million. And last year, we don't have the
numbers for Nescafe specifically, but Nestle as a
(25:13):
whole spent more than 8% of its total sales on advertising and
marketing. And that's coming from a company
that had sales of over $104 billion in 2024.
With a budget that massive, Nestle can pretty much blanket
TV screens, radios, buses, billboards, and today, every
social feed you scroll through, once you nail the message, it's
(25:33):
really just a matter of volume and consistency.
And over time, that's how Nescafe made itself into the
default choice. But Nescafe wasn't done
building. By the 1960s, most of the world
has recovered from World War 2. Economy stabilized, middle
classes grew, and for the first time in decades, people could
now afford more than just the basics.
And Nescafe saw that people started wanting these little
(25:55):
luxuries. It wasn't that people were
looking for something extravagant, it's just that they
wanted to make the day-to-day just a little bit more elevated.
And that's where Nescafe Gold comes in.
It looked richer, it smelled fresher, and it came a gold
packaging that signaled the premium quality.
This wasn't just another instantcoffee, it was marketed as the
upgrade. But here's why Nescafe did it.
(26:15):
It wasn't just about improving the product, it was about
capturing in different market segments.
Nestle knew that there were consumers who were slowly
outgrowing basic instant coffee and others were starting to
slowly embrace the new cafe culture.
And so they just saw that there was this growing group of people
that saw that instant coffee wasno longer enough.
And so without a premium option,Nescafe is losing them.
(26:38):
And that's why they launched Nescafe Gold.
This solved that problem by giving these consumers a reason
to stay inside the brand. Despite this, in the 1980s, a
new challenge was rising. As I mentioned, cafe culture was
spreading. People weren't just drinking
their coffees anymore, they weregoing for the experience of the
cafe. It was a bit of a shift as to
how people saw coffee. So once again, Nestle and
(26:59):
Nescafe had a choice. Do they just allow people to
graduate out of instant coffee entirely, or do they try to
figure out and give them a weight to have that Cafe
experience at home? And that's how they ended up
making Nespresso. What's interesting about
Nespresso is that the people wholove it don't just drink coffee.
They enjoy the tiny ritual that comes with it.
Like, there's something almost ceremonial about it, starting
(27:21):
from that neat little parade of metallic pods lined up on a
rack, color-coded, organized, and displayed like a collection.
For a lot of Nespresso users, the machine became a centerpiece
in their kitchen. It's the appliance they're proud
to show off. Because quite honestly, it's a
beautiful machine. It's sleek, it's modern.
It tells people who visit your home that you take your coffee
(27:43):
seriously, but not in a complicated way.
And that's why Nespresso works. It sells convenience, but
wrapped in ritual. It sells simplicity, but wrapped
in style. It sells coffee, but really, it
sells identity. Nespresso was aspirational, but
it was also expensive. Nestle introduced another year
Dolce Gusto. It's the same pod system, but
(28:04):
more playful, more colorful, more versatile.
They did this because the dangerfor Nestle was obvious.
If people kept obligating their taste outside of home, they
might eventually leave instant coffee behind.
Nespresso and Dolce Gusto ensured that as people's taste
evolved, they stayed within Nespresso's ecosystem.
But if Nespresso and Dolce Gustowas solving the At Home Cafe
(28:26):
experience, there was still one more challenge.
People were falling in love withbrands.
Not just the coffee, but the identity behind the coffee they
drank. And at that time, no brand had a
heavier emotional pull. That's Starbucks.
So instead of trying to out Starbucks, Starbucks Nescafe did
something smarter. In 2018, Nestle struck a $7
(28:46):
billion deal to create the Starbucks at Home 9.
This gave them their rights to sell.
Starbucks means instant mixes and pods and supermarkets.
It was a simple idea. Why fight for a category that
Starbucks already owned when youcould partner with them and
bring the brand straight into people's kitchens?
And honestly, the deal just madeas much sense to Starbucks as it
did for Nestle. Starbucks was never built for
(29:08):
the grocery aisle. Their strength was in the in
store experience. The smell, the ambiance, the
barista calling your name wrong.We didn't have decades of know
how in making products specifically designed for at
home brewing, and Nestle did. So instead of competing with
Nescafe in a space where Starbucks was weak, Starbucks
got to partner with a giant who already mastered that entire
(29:31):
world. Nestle had handled everything
from formulation to packaging tologistics, while Starbucks
simply let the power of its brand.
It was the easiest way for Starbucks to enter millions of
home without needing to build anentire division from scratch.
And Nescafe benefited as well. Instead of seeing Starbucks as a
threat that's pulling people away from instant coffee at
home, they turn that threat intoa revenue stream.
(29:54):
Starbucks expanded its reach beyond physical stores, and
Nestle expanded its coffee empire with one of the most
beloved brands on the planet. But if Starbucks represented the
mainstream coffee crowd, Nestle also move on the extreme end of
the coffee universe. They acquired a stake in Blue
Bottle Coffee, one of the most respected names in 3rd wave.
Now if you're not familiar, 3rd wave is basically a movement
(30:15):
where they treat coffee like a craft.
They focus on single origins, artisanal roasting, ethical
sourcing. They're basically on the
opposite end of mass production.And one of the best brands in
3rd wave at that time was a bluebottle.
And Blue bottle was everything in escapee wasn't.
But that was exactly the point. And one of the reasons why Blue
Bottle meant so much was becauseof the type of crowd that it
(30:38):
attracted. Blue Bottle didn't have
customers, they had super fans. And Blue Bottle built all that
trust by being uncompromising. They were the type where every
detail was very deliberate and intentional.
And that level of commitment created this brand that money
can't buy. Nestle understood the value of
that. Blue Bottle wasn't just another
cafe chain, it was a cultural signal.
(30:59):
By investing in it, Nestle tapped into a group of consumers
who would never go near instant coffee, but who still influenced
how the world talked about coffee.
Nestle knew that they couldn't manufacture that kind of
authenticity. So instead of building an
artisanal brand from scratch, they invested in Blue Bottle and
gained credibility in a segment that would never reach for Nest
(31:20):
Cafe. And now you start to see the
whole picture. The Starbucks partnership
attracted the everyday coffee lover.
The Blue Bottle investment gave them credibility with the
purists. Together, those two moves
covered both ends of the cultural spectrum, even if
specialty coffee stayed small. With this move, Nestle hedged
its bet. And if things did well and 3rd
Wave took over, well, Nestle already had its foot in the
(31:41):
door. And with that, Leslie closed the
last major gaps in their coffee empire.
So when you zoom out, you start to see the real picture.
Nestle didn't just sell in some coffee, it built an empire, a
ladder, a complete coffee ecosystem that met people at
every stage of their taste. From the budget instant coffee
sachets we all grew up with, to the Cafe style pod machines in
(32:01):
espresso and Dolce Gusto, to Starbucks on supermarket
shelves, all the way to the Third Wave crowd through Blue
Bottle. No matter where global coffee
culture move, Nestle already hada bet there.
And that's how Nescafe held the throne for decades.
It was all about adaptability. Whenever the world changed its
relationship with coffee, Nescafe found a way to stay in
the conversation. That's how they built their
(32:23):
lead. But here's a twist.
In the Philippines, that lead didn't last forever.
Because somewhere in Indonesia, a smaller, hungrier competitor
was watching a brand that didn'thave Nestle's money, Nestle's
power, or Nestle's global dominance.
And so they tired heavily on outsmarting the global coffee
giant, and they doubled down on figuring out a flavor profile
that didn't come from Switzerland, but from Southeast
(32:45):
Asia itself. That brand was Gopico.
And that's what we're going to talk about in the next episode.
And that's it. Now you know about the brand
origin story of Nescafe. If you want to sponsor an
episode or if you want to be featured, the links are in the
description. My website's right there.
Just message me and then we can work something out.
You can also follow me on Instagram and Tiktok.
I have shorter clips there. My name is Chris.
(33:06):
I'll see you in the next one.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
The Joe Rogan Experience
The official podcast of comedian Joe Rogan.
Two Guys, Five Rings: Matt, Bowen & The Olympics
Two Guys (Bowen Yang and Matt Rogers). Five Rings (you know, from the Olympics logo). One essential podcast for the 2026 Milan-Cortina Winter Olympics. Bowen Yang (SNL, Wicked) and Matt Rogers (Palm Royale, No Good Deed) of Las Culturistas are back for a second season of Two Guys, Five Rings, a collaboration with NBC Sports and iHeartRadio. In this 15-episode event, Bowen and Matt discuss the top storylines, obsess over Italian culture, and find out what really goes on in the Olympic Village.