Nestlé seals US$7.15bn deal to market Starbucks globally

Starbucks and Nestlé have sealed the deal which grants the latter perpetual rights to market Starbucks' consumer packaged goods and food service products globally, outside of the company’s stores. According to Reuters, the US$7.15 billion licensing deal, drawn up in May, looks to help the coffee giant to focus on improving its mainstay US cafe business as well as open more stores in China.

Marketing has reached out to Starbucks and Nestlé for comment on the value to the deal.

(Read more: Starbucks unveils massive China plan to open 2,700 stores, triple revenue)

According to a statement, Nestlé will be permitted to market Starbucks products such as Seattle’s Best Coffee, teavanaTM/MC, Starbucks VIA instant, torrefazione italia coffee and Starbucks-branded K-Cup pods however, excluding ready-to-drink products and all sales of any products within Starbucks stores.

Nestlé will also be bringing 500 Starbucks staff over to its company, mostly based in Seattle and London as part of the deal.

Through this partnership , both companies will be working closely on the existing Starbucks range of roast and ground coffee, whole beans as well as instant and portioned coffee. It will also be capitalising on the experience and capabilities of both companies to work on innovation aimed at enhancing its product offerings for consumers globally.

“This partnership demonstrates our growth agenda in action, giving Nestlé an unparalleled position in the coffee business with a full suite of innovative brands. With Starbucks, Nescafé and Nespresso we bring together the world’s most iconic coffee brands,” Mark Schneider, Nestlé CEO said.

“The outstanding collaboration between the two teams resulted in a swift completion of this agreement, which will pave the way to capture further growth opportunities,” he added.

In addition, the statement said that the partnership strengthens Nestle's coffee portfolio in the North American coffee business as well as globally expand the Starbucks brand.

Kevin Johnson, president and CEO of Starbucks said that this global coffee alliance is a "significant" strategic milestone for the growth of Starbucks.

“Bringing together the world’s leading coffee retailer, the world’s largest food and beverage company, and the world’s largest and fast-growing installed base of at-home and single-serve coffee machines helps us amplify the Starbucks brand around the world while delivering long-term value creation for our shareholders,” he added.

The international expansion of the business will be led from Nestlé’s global headquarters in Switzerland.

Read also:
Yes, Starbucks is interested in cryptocurrency
Details of Starbucks’ partnership with Alibaba unveiled
Neelofa joins Starbucks as barista for new kindness campaign
Starbucks closes 8,000 stores to educate employees about racial-bias