The company is investigating a range of 'ultra-premium' coffee products to tap into the British consumer's growing taste for 'real coffee'.
Nestle UK is understood to have put out a brief to branding consultancies to develop a name and positioning for this new upmarket range.
Nestle ground coffee, designed for cafetieres, could appear early next year.
The food giant trialled roast and ground coffee brands Hills Bros MJB and Chase & Sanborn in North America, but sold the portfolio to Sara Lee at the end of 1999.
Instant coffee brands Nescafe Original and Nescafe Gold Blend have lost around 9% of their sales value in the past two years, according to Mintel, falling to £237m and £104m respectively.
Marketing's biggest brands survey (August 15) showed Nescafe to be the worst-performing brand in the top 50, losing 8.2% of its sales in the year to April 2002. Sales have been hit as tastes have become more sophisticated. With the advent of high street chains such as Starbucks, consumers are more willing to experiment with cafetieres and espresso-makers at home.
Gold Blend has traditionally been Nestle's upmarket offering, but the company has recently tried to aim it at young women.
Nestle has aimed Nescafe Original at young men, with the ongoing "full flavour behaviour" campaign.
Nestle has tried to offset the decline in instant coffee consumption by launching spin-off Nescafe projects.
It launched its iced coffee product Nescafe Ice last year and continues to experiment with self-heating coffee in a can, although it abandoned the Nescafe Hot When You Want brand last month.
Nestle was not available for comment.
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