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Nestle buys into high-end coffee buzz with Blue Bottle

14 September 2017

Nestle SA agreed to acquire a majority stake in USA cafe operator Blue Bottle Coffee as the Nespresso owner seeks to bolster its lead in the java market amid increasing demand for upscale blends.

Nestle already owns brands such as Nespresso, Nescafe and creamer brand Coffeemate.

The company operates minimalist-style coffee bars in major USA cities and Japan. CEO Bryan Meehan and founder and Chief Product Officer James Freeman will retain their roles. "I'm excited to work with Nestlé to take a long-term approach to becoming a global leader in [specialty] coffee". "Blue Bottle Coffee's passion for quality coffee and mission-based outlook make for a highly successful brand. We felt a real kinship with the team and knew it was the right move for us", Meehan said in a statement.

The chief executive of Starbucks, Howard Schultz stepped down earlier this year to focus on building 1,000 new "Reserve" brand stores and aims to complement them with "roasteries" and tasting rooms. Over this year Blue Bottle expects to double its number of outlets to 55, with stores across the USA and in Tokyo. Nestle did not provide financial details in announcing the deal, but The Financial Times reported that the company is paying up to $500 million for two-thirds of the company, valuing it at about $700 million.

Blue Bottle has received a total of $12o million in funding from many big-name investors over the years, including Morgan Stanley, Fidelity Management and Research, and True Ventures, as well as celebrities like Bono, Jared Leto, Tony Hawk, and the founders of Twitter and Instagram.

Nestle buys into high-end coffee buzz with Blue Bottle