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Mejini Neskah / Shutterstock.com

Nestlé Buys Majority Stake in Hipster Brand Blue Bottle Coffee

The specialty coffee chain is valued at $700 million
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Mejini Neskah / Shutterstock.com

Nestlé has purchased a majority stake in Oakland, California-based Blue Bottle Coffee, according to Nation’s Restaurant News. The new acquisition, announced on Sept. 14, values the chain at $700 million, as reported by Financial Times, and adds another specialty brand to the higher-end coffee rat race. Blue Bottle is expected to grow to 55 coffee shops in the U.S. and Japan by the end of 2017, up from 29 locations in December 2016. The company also recently launched premium, pre-bottled coffees in addition to its ground coffee products.

Nestlé is already the world’s largest coffee producer — the Swiss conglomerate is one of the 10 companies that make almost everything you eat and drink — and Blue Bottle will join their lineup alongside Nespresso coffee capsules and Nescafé coffee. The deal with Blue Bottle is expected to boost the coffee chain into retail outer space, massively increasing their pricey caffeine sales. The acquisition also gives Nestlé a foothold in the high-end coffee market, where it hopes to compete with two other coffee giants: Keurig Green Mountain (which JAB investment group bought two years ago for $13.9 billion) and Starbucks.

“This move underlines Nestlé’s focus on investing in high-growth categories and acting on consumer trends,” Nestlé CEO Mark Schneider said in a statement. “Blue Bottle Coffee’s passion for quality coffee and mission-based outlook make for a highly successful brand. Their path to scale is clearly defined and benefits from increasing consumer appreciation for delicious and sustainable coffee.”

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Blue Bottle was founded in the early 2000s and has raised $120 million in backing from investors, including U2 lead singer Bono and the founders of Twitter and Instagram. For something to go with an artisanal cup of joe: Here are 26 morning pick-me-ups that aren’t coffee.