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MILAN – Nestlé is reportedly considering selling Blue Bottle, the California-based coffee chain in which it acquired a 68% stake, in 2017, for $425 million at a market valuation of $700 million. This is according to Reuters, citing sources close to the matter. Nestlé has reportedly turned to investment bank Morgan Stanley to evaluate a range of options for this asset, including its sale, which would likely be at a valuation below the purchase price.
Both Nestlé and Morgan Stanley declined to comment. The Swiss multinational could also decide to sell the cafés (around 100 locations in the United States and Asia) while retaining the intellectual property rights to the brand in order to continue selling Blue Bottle-branded products, such as ground coffee and various accessories.
Analysts say this move is part of Nestlé’s new strategy, relaunched by the company’s new CEO, Philipp Navratil (formerly CEO of Nespresso), which aims to streamline the company’s portfolio by focusing on scalable, global brands rather than niche assets.
This approach includes the strategic review of certain vitamin supplement brands and the overhauling of the mineral water division, which includes the Perrier and San Pellegrino brands.
Blue Bottle was acquired eight years ago to capture the rapidly growing specialty coffee market, as a brand to complement Nescafé and Nespresso. Its sale would generate cash to reinvest in the core coffee business.
Bleu Bottle Coffee was established in 2002 in Oakland by James Freeman and opened its first store in San Francisco in 2005.
The company’s name is inspired by a famous historic Viennese café (Hof zur Blauen Flasche) founded in 1683 by Jerzy Franciszek Kulczycki, a hero of the Battle of Vienna.
News of the potential sale of Blue Bottle comes just weeks after rumours emerged that Coca-Cola might sell Costa Coffee.
