Nestlé's recent investment in an instant-coffee plant in South Africa is a sign that, despite coffee shops mushrooming, instant coffee is still king. Instant-coffee market leader Nestlé South Africa, which owns the Nescafé and Ricoffy brands, cemented its R1.2-billion investment in its instant-coffee plant in Estcourt in KwaZulu-Natal this week.The plant is Nestlé's biggest investment on the continent. It features a new Elgron 5 dry-spraying machine, the largest in the world, producing about 3.2 tons of coffee powder an hour."Through this investment, we will increase the capacity of our Nescafé Ricoffy factory and meet the growing consumer demand for coffee in the region," said Ravi Pillay, corporate affairs director for Nestlé South Africa.The investment comes in the same week South Africa welcomed the giant US coffee franchise Starbucks, which opened its first store in Rosebank, Johannesburg, on Thursday.story_article_left1The coffee market in South Africa has been transformedin the past decade, with a number of small and independent coffee shops openingin bigger cities.Starbucks will compete with local coffee franchises such as Vida e Caffé and Seattle Coffee Company.Grant Phillips, Nestlé's business manager for beverages, said instant coffee was here to stay."South Africans still enjoy instant coffee," he said, and preferred coffee with a milder taste to that enjoyed by consumers in other parts of the world.He added that South Africans were drinking between 250 and 300 cups per capita a year.This was considered a medium coffee-consumption pattern.In Europe and the US, coffee consumption was between 700 to 800 cups per capita, said Phillips.Nestlé's Ricoffy - in existence for more than 60 years - has defined a preferred coffee taste for many South Africans."It has been around for so long, so Ricoffy has defined South Africans' taste preference and, to some extent, local consumers love a mild cup of coffee," said Phillips.In South Africa, one in every two cups drunk or sold in retail is Nescafé Ricoffy, he added.According to market intelligence company Euromonitor, in its summary report on coffee in South Africa released this month, Nestlé South Africa continued to lead the coffee category, with a 39% value share during 2015.block_quotes_start Starbucks' arrival in South Africa will develop the coffee culture and increase consumption block_quotes_endEuromonitor said Nestlé attributed its leadership to its Nescafé brand, with a 33% value share ahead of Jacobs Douwe Egberts, which has continuously gained ground and had a 6% value share last year.Deon Mastenbroek, national training manager at Ciro, said the majority of South Africa's coffee consumption was still in the instant format, with only a small percentage of domestic coffee consumption being "whole bean" or "bean to cup" coffee.Ciro is owned by food company AVI, which also owns brands such as Lavazza, House of Coffees and FreshPak."Many households can't afford to buy expensive coffee machines, so instant coffee remains the obvious choice."Mastenbroek added that South Africans' coffee culture was slightly different compared with Europe or the US, where "coffee on the go" was very big."However, this is slowly changing, with more coffee-on-the-go outlets opening in forecourts, office parks and shopping centres."Mastenbroek said the arrival of Starbucks had created a renewed interest in coffee among local consumers and it would possibly bring non-drinkers into the market.mini_story_image_hright1"If Starbucks gets South Africans to drink more coffee, the entire coffee industry will benefit."The arrival of Starbucks will not hamper the growth of instant coffee, as Nestlé said its recent investment to expand the Estcourt plant would help South Africa become an exporter to southern African markets.There was room for coffee to grow, because not every household in the country was buying coffee "and not everyone was drinking coffee on a daily basis", said Phillips.Starbucks - through its exclusive South African licence holder, Taste Holdings - plans to roll out stores throughout the country."Starbucks' arrival in South Africa will develop the coffee culture and increase consumption," Phillips said."I see it as a good thing and it will be another brand adding to the number of growing coffee houses that we have seen in the past couple of years."Euromonitor noted that convenience had led to a notable growth in shelf space allocated to 3-in-1 instant-coffee products, which were previously unpopular due to the higher unit price relative to buying coffee, milk and sugar separately.However, the report also found that many South Africans with larger families still prefer to buy traditional instant coffee in a metal tin, because it costs far less...