VEVEY, Switzerland -- Nestle has received the perpetual rights to market Starbucks consumer and foodservice products globally for a cash payment of $7.15 billion to the coffee giant, subject to regulatory approval. The deal is expected to close this summer or in early fall.
The agreement allows Nestle to market, sell and distribute Starbucks, Seattle’s Best Coffee, Starbucks Reserve, Teavana, Starbucks Via and Torrefazione Italia packaged coffee and tea products anywhere outside of Seattle-based Starbucks’ 28,000 coffee shops. It excludes ready-to-drink items and any products currently within Starbucks stores.
“This transaction is a significant step for our coffee business,” said Mark Schneider, CEO of Nestle. "With Starbucks, Nescafe and Nespresso, we bring together three iconic brands in the world of coffee. [With] Starbucks as our partner, both companies have true passion for outstanding coffee and are proud to be recognized as global leaders for their responsible and sustainable coffee sourcing. This is a great day for coffee lovers around the world."
Nestle’s coffee business is its largest high-growth category, Schneider said.
According to the agreement, Nestle and Starbucks will collaborate on innovation and go-to-market strategies while Starbucks will lead in sourcing and roasting, and its own global brand management. Also, about 500 Starbucks employees will join Nestle to drive business performance and global expansion.
"This global coffee alliance will bring the Starbucks experience to the homes of millions more around the world through the reach and reputation of Nestle,” said Kevin Johnson, president and CEO of Starbucks. "This historic deal is part of our ongoing efforts to focus and evolve our business to meet the changing consumer needs, and we are proud to work alongside a company that is committed to our shared values.”
Vevey, Switzerland-based Nestle is a leading food and beverage company with more than 2,000 brands distributed in nearly 200 countries around the world. With cafes around the globe, Seattle-based Starbucks is a roaster and retailer of specialty coffees.
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