Nestle, the world's biggest food group, said Saturday it will invest 5 billion pesos ($390 million) in Mexico over the next three years to increase coffee processing capacity, part of a $1 billion expansion plan.

"The majority of these 5 billion pesos will be invested in the Nescafe instant coffee processing plant," Nestle said in a statement, adding that the investment would increase capacity by 40 percent at the factory in Toluca near Mexico City.

Mexico, a major world coffee producer, has ...