August 8, 2017 / 7:40 PM / a year ago

JDE brings premium coffee brand to Brazil as luxury segment soars

SAO PAULO, Aug 8 (Reuters) - Jacobs Douwe Egberts (JDE), the world's second-largest coffee retailer, said on Tuesday it will launch its super premium brand L'OR in Brazil, to take advantage of a luxury goods segment that has grown rapidly despite an economic downturn.

JDE, which is second only to Nestlé in global coffee retail with 9.5 percent share of revenue, according to Euromonitor, is aiming to distribute a full portfolio of beans, ground roast, instant and capsules for L'OR coffee in up to 2,000 locations in Brazil.

"Coffee sales were not impacted by the recession and the luxury segment continues to grow sharply," said JDE Brazil head Lara Brans during a press conference in Sao Paulo. Brazil's gross domestic product grew in the first quarter after eight consecutive quarters of contraction.

JDE expects the market for super premium coffee in Brazil to double in size in three years. The firm sees the segment having growth similar to that of premium beers and chocolates, whose sales increased close to 20 percent last year, despite Brazil's deepest recession on record, Brans said.

The company invested in new equipment at its plant in Jundiaí, Sao Paulo state, to produce most of the L'OR items to be sold in Brazil. Coffee capsules compatible with Nespresso machines will be imported from France.

Brans said JDE will be the first company to sell the Nespresso-compatible aluminum capsules in supermarkets in Brazil. Nestlé sells its capsules directly to consumers, online or at its own stores.

The market for capsule coffee grew 50 percent in Brazil in 2016, according to JDE. (Reporting by Marcelo Teixeira; Editing by Steve Orlofsky)

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