FDBusiness.com

Nestlé and Starbucks Bring Together the World’s Most Iconic Coffee Brands in $7.15 Billion Deal

 Breaking News
  • Diageo Launches New Super-premium Gin Diageo is introducing a new super-premium Italian gin, Villa Ascenti. The launch comes at a time when the super-premium and ultra-premium gin categories are the fastest growing segment within gin in Europe. Villa Ascenti will initially be available in 14 European countries. A new €420,000 (£360,000) distillery has been built on the site of the brand [...]...
  • European Commission Proposes to Increase Price Transparency in the Food Chain Having banned unfair trading practices and improved producer co-operation, the European Commission has presented the third element to improve fairness in the food supply chain by introducing greater transparency in the way prices are reported throughout the chain. The European Commission has tabled a proposal that will make available crucial information on how prices are determined [...]...
  • Irish Distillers Launches ‘A Story of Irish Whiskey’ Podcast Series Irish Distillers, Ireland’s leading supplier of spirits and wines and producer of some of the world’s most well-known and successful Irish whiskeys, has launched its first podcast, ‘A Story of Irish Whiskey’. Produced by Last Cast Media, the five-part series is a story of coming together, sharing, conquering markets and how three families, competitors for [...]...
  • C&C Group Increases Revenue by 187.3% to over €1.5 Billion C&C Group, the UK and Ireland drinks production and distribution business, increased net revenue by 187.3% to €1.575 billion in 12 months ended 28 February 2019, reflecting the acquisition of Matthew Clark and Bibendum from the administrators of Conviviality Group in April 2018. Excluding Matthew Clark and Bibendum, and on a constant currency basis, net [...]...
  • 2 Sisters Accelerates Business Transformation 2 Sisters Food Group has announced a series of actions as part of its accelerating transformational strategy to turnaround the business. The company is making further investments in its UK Poultry and Fox’s Biscuits businesses, and is proposing to reduce the number of its UK Poultry sites in order to produce shorter, more efficient supply [...]...

Nestlé and Starbucks Bring Together the World’s Most Iconic Coffee Brands in $7.15 Billion Deal

Nestlé and Starbucks Bring Together the World’s Most Iconic Coffee Brands in $7.15 Billion Deal
May 08
11:51 2018

Nestlé has announced an agreement granting the company perpetual rights to market Starbucks consumer and foodservice products globally, outside of the company’s coffee shops. This transaction provides Nestlé with a strong platform for continued growth in North America with leadership positions in the premium roast and ground and portioned coffee businesses. It also allows Nestlé to capture exciting new growth opportunities in the rest of the world with Starbucks premium products. As a complete provider of coffee solutions, Nestlé will accelerate growth in out-of-home channels. The two companies will work closely together on innovation and go-to-market strategies to bring the best coffee to customers around the world.

“This transaction is a significant step for our coffee business, Nestlé’s largest high-growth category,” explains Mark Schneider, chief executive of Nestlé. “With Starbucks, Nescafé and Nespresso we bring together three iconic brands in the world of coffee. We are delighted to have Starbucks as our partner. Both companies have true passion for outstanding coffee and are proud to be recognized as global leaders for their responsible and sustainable coffee sourcing. This is a great day for coffee lovers around the world.”

As part of this transaction, Starbucks will receive an up-front cash payment of US$7.15 billion for a business which generated annual sales of US$2 billion. The transaction does not include the transfer of any fixed assets, which facilitates a smooth and efficient integration. Nestlé expects this business to contribute positively to its earnings per share and organic growth targets as from 2019. Nestlé’s ongoing share-buyback program will remain unchanged.

Approximately 500 Starbucks employees will join the Nestlé family to drive performance of the existing business and global expansion. Operations will continue to be located in Seattle.

“This global coffee alliance will bring the Starbucks experience to the homes of millions more around the world through the reach and reputation of Nestlé,” says Kevin Johnson, president and chief executive of Starbucks. “This historic deal is part of our ongoing efforts to focus and evolve our business to meet the changing consumer needs, and we are proud to work alongside a company that is committed to our shared values.”

The agreement is subject to customary regulatory approval and is expected to close by the end of 2018. The agreement excludes Ready-to-Drink products and all sales of any products within Starbucks coffee shops.

About Author

mike

mike

Related Articles



Food & Drink Business Conference & Exhibition 2016

Upcoming Events

  • June 18, 2019Multimodal 2019
  • June 25, 2019BevExpo 2019
AEC v1.0.4

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber

Subscribe Here



Advertisements