Nestlé seals 6 billion euro deal with Starbucks

Swiss food giant Nestlé has signed a distribution deal with Starbucks: for 6 billion euro, the company can start selling the American chain’s brands.

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The deal grants Nestlé the opportunity to sell products with the green-white Starbucks logo all across the world, for its Nespresso and Nescafé devices. Seattle’s Best Coffee, Starbucks Reserve, Starbucks VIA and Torrefazione Italia will also now feature in the Swiss’ product range. Starbucks will continue to make the products for the American market however. The collaboration should also result in a series of new formulas and innovations. 

Nestlé hopes to obtain a stronger presence in the enormous American market, particularly in the premium segment, which is currently dominated by Starbucks and JAB. “We are bringing together three iconic coffee brands in Starbucks, Nescafé en Nespresso”, CEO Mark Schneider boasted.

Bank Vontobel’s analyst Jean-Philippe Bertschy says it is a very high fee, but that it could pay itself back in three to four years’ time. Nestlé would start selling Starbucks products in 2019, but needs to obtain permits. Tea brand Teavana is also part of the deal, but Starbucks’ other tea brands and its in-store sales are not.