Nestlé Drops $7.15 Billion To Sell Starbucks Coffee

By Neat Pour Staff |

Is Starbucks too corporate for you? Well, the coffee giant just found an even larger corporation to get in bed with. Nestlé, of Nescafe and Nespresso fame, just paid the coffee giant $7.15 billion for the rights to sell their beans globally.

Nestlé is already the biggest food and beverage company in the world. Starbucks boasts the most recognizable brand name in the sector. The move will allow Nestle to leverage their vast distribution and branding resources to push Starbucks coffee.

Specifically, this means that Nestlé will start selling Starbucks branded beans, ground beans, and instant coffee. Also, you’ll finally see Starbucks capsules designed for the Nespresso and Dolce Gusto machines that George Clooney hypes. Starbucks’ shops as well as their Ready-to-Drink products will be excluded from the deal.

Starbucks will still be at the helm when it comes to acquiring the green beans. However, Nestlé will then purchase those beans and roast and package them under guidelines set forth by Starbucks. To aid this process, about 500 Starbucks employees are expected to migrate to Nestlé.

“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,” said Kevin Johnson, President and CEO 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 acquisition is the first major move by newly installed CEO Mark Schneider, the first outsider to helm the company. Investors reacted well with the stock jumping 1.2 points (1.57%) to 77.56. Inversely, Starbucks shares dipped one quarter of a point to 57.45.

Earlier this year, Nestlé also picked up a stake in premium brand Blue Bottle.

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