Starbucks has announced a new partnership with Nestlé in an effort to expand its global reach of prepackaged java. The multibillion-dollar Swiss food and beverage company — which owns Nespresso, Nescafé, Kit Kat, Smarties, and more — will pay Starbucks $7.15 billion for rights to sell the Seattle-based coffee chain’s products 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,” Starbucks president and chief executive officer Kevin Johnson said in a release. “This historic deal is part of our ongoing efforts to focus and evolve our business to meet changing consumer needs, and we are proud to work alongside a company that is committed to our shared values.”
2017 was a historically slow year for sales at Nestlé, and according to experts, the company’s new alliance is nothing short of necessary.
“Nestlé needed a big brand, and they needed one fast,” Alain Oberhuber, an analyst at MainFirst Bank in Zurich, told Bloomberg. “Starbucks is the only strong brand in roast-and-ground. It’s a rather defensive move — a bit late — but nevertheless, a strategically absolutely vital step.”
Nestlé will market Starbucks, Seattle’s Best Coffee, Starbucks Reserve, Teavana, Starbucks VIA, and Torrefazione bagged coffee and single-serve K-cup pods. The agreement, which is expected to close this summer or early fall, excludes ready-to-drink coffee, tea, and juice products. For more on the coffee chain that recently debuted cold brew-infused whipped cream, here are the healthiest and unhealthiest Starbucks drinks.