The coffee machine is designed to create the ultimate 'coffee shop at home' experience by combining high quality, cutting-edge technology and sustainability, Nestlé noted.
The coffee pods in the new range are paper-based, home compostable and use 70% less packaging (by weight) than current capsules.
David Rennie, head of Nestlé Coffee Brands, said, "Nestlé is a relentless innovator in the coffee category. We are continuously looking to bring consumers new experiences, variety and quality in their coffee, in a sustainable way.
"With Nescafé Dolce Gusto Neo, we have created the perfect combination of a great coffee experience, new coffee system and packaging, all in one."
Nescafé Dolce Gusto Neo features Nestlé's proprietary SmartBrew technology that combines three brewing methods, allowing consumers to enjoy, high-quality espressos, coffeeshop-like americanos, and drip-style coffees, in one single machine.
The coffee machine automatically recognises the pod, adapting the brewing method to each selected coffee.
Neo will be introduced in Brazil this year with plans to expand to more countries over time.
The coffee capsules are entirely produced in Nescafé Dolce Gusto's factory in Montes Claros, Brazil.
It is the first Nestlé factory to receive Nestlé's internal sustainability certification 'Triple Zero' for three dimensions: water, waste creation and greenhouse gas emissions.
Nestlé will invest more than CHF 50 million (R$300 million) in the factory to support the launch.
'Coffee Shop at Home' Experience
Arnaud Deschamps, head of Nescafé Dolce Gusto, said, "In a time of rapid change, we see increasing expectations about coffee variety, versatility, personalisation, and sustainability, with no compromise on quality and taste. With Neo, we have designed a 'Coffee Shop at Home' experience that aims to meet the expectations of today's most passionate coffee lovers.
"Every aspect of Neo has been carefully considered - the machine technology, the user interface, the coffee and our first home-compostable paper-based pods. Neo represents the long-term future of our brand."
Neo's paper-based pods are certified for composting, both at home and industrial levels, by TÜV Austria, an international certification body.
The pods are made from 1g of paper sourced from suppliers certified by the Forest Stewardship Council (FSC).
It comes in a compostable biopolymer lining, which is thinner than human hair, to help protect the coffee quality and freshness from oxidation.
The coffee machine can be connected to a smartphone, enabling shoppers to personalise their coffee preparation remotely.
Nescafé Dolce Gusto's loyalty programme offers rewards and adapts personal recommendations to the consumer's profile each time coffee is prepared.
The coffee machine uses 50% recycled plastic for parts that do not come in contact with food, while the thermoblock, which heats the water, is made of 85% recycled aluminium.
It is designed to be more convenient to dismantle and repair, with an A++ energy rating, and a switch-off eco-mode.