Nestlé reportedly considers sale of Blue Bottle Coffee

Nestlé is reportedly mulling the potential sale of its popular Blue Bottle Coffee chain and is in discussions with Morgan Stanley.

This is part of the strategic assessment by Nestlé's new CEO, Philipp Navratil, aimed at streamlining the company’s portfolio and divesting from its physical retail operations, according to Reuters.

Currently, Nestlé operates approximately 100 Blue Bottle Coffee shops in Asia and US, offering Blue Bottle Coffee branded coffee beans and merchandise, including coffee mugs. In Hong Kong, there are five Blue Bottle Coffee locations. Nestlé may sell its coffee shops while keeping the Blue Bottle Coffee brand intellectual property (IP) to continue offering related products, according to the report.

Nestlé acquired a majority stake in Blue Bottle Coffee in 2017, valuing the company at around US$700 million. However, the valuation for the potential sale of Blue Bottle Coffee is expected to be lower than it was in 2017.

Nestlé has declined to comment, while MARKETING-INTERACTIVE has reached out to Morgan Stanley for a statement.

Back in July, Nestlé launched a strategic assessment of several vitamin brands, including Nature's Bounty, Osteo Bi-Flex, and Puritan's Pride, as well as its in-house brand business in US, according to the report. The company also plans to divest its bottled water business, which includes the Perrier and S.Pellegrino brands.

Founded by James Freeman in 2002 in Oakland, California, Blue Bottle Coffee has experienced significant growth and now operates cafes in the U.S. and Asia, including locations in Hong Kong, Japan, and South Korea. Meanwhile, Nestlé’s larger coffee brands include Nescafé and Nespresso.

Don’t miss: Blue Bottle reintroduces exclusive studio experience in HK

On the other hand, US soft drinks giant Coca-Cola is collaborating with investment bank Lazard to explore various options, including the possible sale of the British coffee chain Costa, according to Reuters. It has conducted preliminary discussions with a select group of potential bidders, including private equity firms.

Coca Cola acquired Costa Coffee in 2018 for over US$5 billion, to strengthen its position in the global coffee market, competing with Starbucks and Nestle.

Related articles:

Step into the 'Upside down' with Nestlé’s new Stranger Things Drumstick
Blue Bottle reintroduces exclusive studio experience in HK
Blue Bottle brings Finnish coffee culture to HK with Marimekko partnership