It will boost Nestlé’s position in the US coffee market, the largest in the world.
Nestlé has acquired a majority stake in California-based Blue Bottle Coffee as the Swiss conglomerate aims to bolster its presence in the high-end coffee market.
The world’s largest food and drinks company is understood to be paying $500 million for a 68 per cent stake in Blue Bottle, which operates coffee shops in the US and Japan. Its total number of branches is expected to reach 55 by the end of 2017, up from 29 at the end of last year.
Nestlé said the acquisition will allow it to enter the super-premium coffee shop segment with an iconic brand for discerning coffee drinkers. It will boost Nestlé’s position in the US coffee market, the largest in the world, and see it compete with JAB investment group, which bought Keurig Green Mountain for $13.9 billion two years ago.
Founded in 2002 by James Freeman, Blue Bottle has raised over $100 million from investors such as Google Ventures, the founder of Instagram and U2 frontman Bono. In addition to retail, the company sells roasted whole bean and ground coffee, and markets ready-to-drink cold brew coffee. Its cafes only serve beans roasted in the previous two weeks.
Blue Bottle will continue to operate as a stand-alone entity as it gains access to Nestlé’s capabilities in coffee and strong global consumer reach. The current management and employees will retain a minority stake and continue to run the business. Bryan Meehan will remain as CEO and James Freeman as chief product officer.