Nestle to buy 68pc stake in Blue Bottle Coffee
LOS ANGELES: Nestle SA agreed to acquire a majority stake in coffee brand Blue Bottle Coffee as the Nespresso owner seeks to bolster its United States presence amid increasing demand for upscale blends.
Nestle will pay about US$425 million (RM1.78 billion) for a 68 per cent stake in the firm, said a source.
Blue Bottle sells coffee directly to customers online and operates 40 shops in the US and Japan. This number is expected to grow to 55 by this year-end, up from 29 a year earlier, said Nestle.
Nestle’s No. 1 position in the global packaged coffee market has been challenged by JAB Holding Co, which has spent more than US$30 billion expanding its coffee empire with acquisitions, including Keurig Green Mountain and Peet’s.
Nestle chief executive officer (CEO) Mark Schneider has singled out java as one of the Swiss company’s biggest growth opportunities, with a focus on expanding sales in the US, the world’s largest coffee market.
Nestle sells Nespresso machines in the US, but still trails Keurig in that category.
“This move underlines Nestle’s focus on investing in high-growth categories and acting on consumer trends,” said Schneider.
The food and beverage giant is also eager to expand its presence in US retail stores.
Blue Bottle produces a readyto-drink cold brew product that is sold in some Whole Foods stores and is working to get its packaged coffee into the upscale organic grocery chain, which was recently acquired by Amazon.com Inc.
The company is working to maintain its freshness standards as it seeks to expand its retail presence and could be available nationwide at Whole Foods stores next year, according to CEO Bryan Meehan. “They invested because they think we’re onto something,” he said Bloomberg