Nestlé to acquire Seattle’s Best Coffee from Starbucks
Seattle's Best Coffee's ‘approachable’ line of whole bean, roast and ground packaged coffee, and K-Cup pods are available in a variety of roasts and flavor profiles across both foodservice and grocery channels.
The brand will join Nestlé’s coffee portfolio which already includes Starbucks packaged coffees (distributed by the duo’s Global Coffee Alliance); Nescafé, Nespresso and Blue Bottle Coffee (acquired in 2017).
“The addition adds depth to Nestlé's North America coffee portfolio by further expanding the company's position in the category,” says the company.
“This transaction is part of Nestlé's focus on driving sustained profitable growth in the coffee category."
'More choice for everyday coffee'
Founded in 1970, Seattle’s Best Coffee has been a subsidiary of Starbucks since 2003: generally offering a lower price point than the flagship Starbucks brand.
The American coffee giant says the sale to Nestle will allow each company to focus on its core strengths: as well as continue to build the Global Coffee Alliance.
The Global Coffee Alliance, founded in 2018, has already seen the duo launch a range of premium coffee products (today, Nestlé distributes Starbucks consumer products and foodservice beverages across more than 80 markets outside Starbucks retail stores and in 2021, the total global sales of these products reached CHF 3.1bn / $3.1bn).
"We continue to deepen our partnership with Nestlé to deliver the best of the Starbucks Experience to our customers in channels outside of our retail stores," said Michael Conway, group president, Starbucks International and Channel Development. "We're confident that Nestlé will continue to grow the Seattle's Best Coffee brand as we focus on our strategy to elevate the premium coffee experience for consumers through the Starbucks brand."
Through the Global Coffee Alliance, Nestlé and Starbucks will continue to work together closely to develop ‘new, innovative products and go-to market strategies that will amplify the reach and expand the unique experience of the Starbucks brand locally and globally’.
"Our partnership with Starbucks has confirmed Nestlé's leading position in the dynamic and growing global coffee market," said David Rennie, Head of Nestlé Coffee Brands. "With the well-known Seattle's Best Coffee brand, we will continue to build our leadership in coffee by offering consumers more choice for their everyday coffee."
The value of the transaction, which is expected to close by the end of the year, has not been disclosed.
Coffee has been a consistently strong point in Nestlé's portfolio: which ranges from confectionery and bottled water to supplements and pet food.
Releasing its nine-month sales for 2022 this morning, Nestlé reported sales in coffee have grown at a high single-digit rate, with 'positive sales developments' for Nescafé, Starbucks and Nespresso. In the US, sales in Nestlé Professional and Starbucks out-of-home products grew at a strong double-digit rate.
Growth in the beverages category, including Starbucks at-home products, Coffee mate and Nescafé, was close to a double-digit rate.
Cocoa and malt beverages also saw high single-digit growth, with particular strength for Milo as well as Nesquik ready-to-drink formats.