Heavy! Nestlé has been exposed to consider selling blue bottle coffee!
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Recently, Reuters reported that global food and beverage giant Nestlé is working with Wall Street investment bank Morgan Stanley to conduct a strategic assessment of the future of its high-end coffee chain brand Blue Bottle Coffee, including potential sale options have become a core issue.
Reuters quoted "three people familiar with the matter" as saying Nestlé is working with JPMorgan Chase to evaluate various options for its Blue Bottle coffee chain, including a possible sale. Both Nestlé and Morgan Stanley declined to comment on this.
According to a consumer analysis, Nestlé may adopt a more flexible strategy when handling the Blue Bottle coffee business, which is to choose to sell its physical store network but retain the brand's intellectual property rights. This means that consumers may still be able to buy blue bottle coffee products on the shelves in the future, but its iconic offline experience space will change ownership.
It is reported that in order to quickly enter the boutique coffee market and attract young consumers, Nestlé acquired a 68% stake in Blue Bottle Coffee for US$700 million in 2017. After Nestlé completes the acquisition, Blue Bottle Coffee will remain operationally independent, and current management and employees will retain a minority stake.
It is worth noting that before being acquired by Nestlé, Blue Bottle Coffee, a boutique coffee brand founded by clarinetist James Freeman in 2002, only opened stores in the United States and Japan, with 29 stores in 2016.
After Nestlé's acquisition, Blue Bottle Coffee began to expand its store size. Since its development, Blue Bottle Coffee has stores in the United States, Japan, South Korea, China (Mainland and Hong Kong), and Singapore. According to Nestlé officials, it has more than 100 stores worldwide. In addition, after being acquired by Nestlé, Blue Bottle Coffee worked with Nestlé's coffee brands to develop limited edition capsule coffee, cold coffee, etc., and used Nestlé's outlets to sell products.
However, times have changed, and consumers have pointed out that the final transaction price of any potential sale is expected to be significantly lower than the acquisition valuation of the year, that is, Nestlé may sell Blue Bottle coffee at a price lower than the previous valuation of US$700 million.
Reuters pointed out that considering selling Blue Bottle Coffee is part of a broader strategic review led by Nestlé's new CEO, aiming to streamline the company's complex asset portfolio and gradually exit the physical retail sector that requires refined operations. This move also reflects the current trend of broader strategic adjustments in the consumer goods industry.
Coincidentally, another consumer giant, Coca-Cola, is also considering selling its coffee chain brand Costa Coffee. Relevant reports say that Coca-Cola may still retain its ready-to-drink coffee business with potential space, mainly considering selling the Costa coffee store business. This indicates that large groups may be facing common challenges and reflections in operating physical coffee chain businesses.
In addition, Blue Bottle Coffee currently has 15 stores in mainland China, and the latest city to enter is Hangzhou. Whether its domestic store business will be affected by the news of the sale, a media reporter asked the relevant person in charge of Nestlé China and Blue Bottle Coffee about the situation, but did not receive a reply from the other party.
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