Nes­tle to buy 68pc stake in Blue Bot­tle Cof­fee

New Straits Times - - Business / World -

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

REUTERS PIC

Nes­tle agreed to ac­quire a ma­jor­ity stake in cof­fee brand Blue Bot­tle Cof­fee, which sells cof­fee di­rectly to cus­tomers on­line and op­er­ates 40 shops in the United States and Ja­pan.

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