In the food and beverage industry, Nestlé is poised to divest its California-based coffee brand, Blue Bottle Coffee. This information comes from a recent report by Reuters.
The Swiss food giant is rumored to be partnering with investment bank Morgan Stanley to evaluate various options, which may include the potential sale of Blue Bottle Coffee.
This strategic decision comes as part of a broader initiative to streamline Nestlé’s portfolio under the leadership of new CEO Philipp Navratil.
Nestlé and Blue Bottle Coffee
Nestlé initially acquired a majority stake in Blue Bottle Coffee in 2017, valuing the premium coffee roaster at about $700 million (€602 million). However, projections indicate that a sale price may be lower.
Presently, Nestlé operates around 100 Blue Bottle locations across the United States and Asia, in addition to distributing Blue Bottle-branded products, such as coffee grounds and merchandise.
Sources suggest that Nestlé could opt to sell the cafes while retaining the brand’s intellectual property to continue offering its products.
Nestlé’s more prominent coffee brands include Nescafé and Nespresso.
This news follows a similar development involving beverage giant Coca-Cola, which is evaluating options to divest its coffee chain Costa Coffee.
Nestlé’s Coffee Business
If Nestlé proceeds with this sale, it would represent a significant pivot in its premium coffee strategy.
At one point, Blue Bottle Coffee was envisioned as a means for Nestlé to capture the rapidly expanding specialty coffee market, enhancing its established brands Nescafé and Nespresso.
Divesting the café operations indicates Nestlé may prioritize scalable, global brands over niche coffee shops.
This strategic direction could free up resources for innovation and expansion within its core coffee portfolio, reinforcing Nestlé’s standing in the competitive global coffee market.
As of now, Nestlé has not responded to requests for comment.
