Dive Brief:
- Nestlé is selling its Blue Bottle Coffee business to China-based Centurium Capital for an undisclosed amount, the company announced Thursday.
- The deal includes Blue Bottle's cafes and its CPG business. Nestlé will retain the rights for Blue Bottle’s single-serve Nespresso pods, a spokesperson confirmed to Food Dive.
- Centurion Capital is the biggest stakeholder of China's largest coffee chain Luckin Coffee. The deal, expected to close in the first half of this year, will expand Centurion's presence in the U.S.
Dive Insight:
Nestlé has been working quickly to prune its portfolio as new CEO Philipp Navratil looks to streamline its food and beverage business to focus on core brands amid changing consumer preferences.
Along with Blue Bottle, Nestlé announced it was engaging with potential partners for its waters and premium beverages business, which includes Sanpellegrino. The company is also looking to sell off its mainstream vitamins, minerals and supplements business.
The pruning of some slow-growing or noncore brands continues a multi-year portfolio overall for the Switzerland-based food and beverage giant. The Lean Cuisine and Hot Pockets owner has previously sold its U.S. candy business, its North American bottled water operations and most recently announced it would offload the remainder of its ice cream assets.
The Blue Bottle deal frees Nestlé from the brand’s cafe footprint, which includes more than 100 locations across the United States and Asia. The brand also sells coffee beans, as well as ready-to-drink beverages, such as cold brew and lattes in cans and cartons.
While financial details weren't provided, previous reports have pegged the sale at $400 million, far below Blue Bottle's $700 million valuation when Nestlé bought the brand in 2017.
The Blue Bottle divestiture comes on the same day that Nestlé posted first-quarter sales of 21.32 billion Swiss francs (or $27.16 billion), a drop of 5.7% from a year earlier. The company’s real internal growth, which measures volume growth excluding price increases and acquisitions, rose 1.2% during the period.
Nestlé has struggled recently with turnover in its executive ranks and weaker-than-expected results across its operations. Marty Thompson, the head of its U.S. operations, said in December that Nestlé is undertaking an extensive review of its portfolio in the region as the DiGiorno pizza maker works with a “sense of urgency” to strengthen its brands and win more eating occasions.
Christopher Doering contributed to this story.
