Nestlé has signed an agreement granting the company rights to market Starbucks’ consumer and foodservice products globally.
The transaction provides Nestlé with a 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 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,” said the company.
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 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.”
“This transaction is a significant step for our coffee business, Nestlé’s largest high-growth category,” said Mark Schneider, CEO, 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 the 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.
Approximately 500 Starbucks employees will join Nestlé. Operations will continue to be in Seattle.