Nestlé Faces Coffee Challenge from Merger of #2 and #3

The global coffee industry has long had a clear leader—Nestlé. But now, two of its biggest rivals are joining forces in a move that could shake up the balance of power. The question is whether their combined strength will be enough to challenge Nestlé’s decades-long reign at the top.

Yes, Mondelez International is merging its coffee business with D.E Master Blenders 1753 B.V. to form Jacobs Douwe Egberts, a new company headquartered in the Netherlands with projected annual revenue of $7 billion. Mondelez will own 49% and receive $5 billion in compensation, while DEMB holds 51%. The deal is expected to close in 2015 pending regulatory approval.

Why This Merger Matters

The global coffee market is worth approximately $810 billion, and for years Nestlé has sat firmly at the top. Until now, its nearest competitors were Mondelez (with coffee revenues of $3.9 billion in 2013) and D.E Master Blenders 1753 (at $3.4 billion). While their combined revenue of $7.3 billion still falls short of Nestlé’s, the newly formed Jacobs Douwe Egberts positions itself as a “world-leading” pure-play coffee company—sharply focused, well-capitalized, and strategically positioned to take on the market leader.

The Players Behind the Merger

Mondelez International, originally part of Kraft Foods, was spun off in late 2012 to focus on snacks and beverages. Its key coffee brand globally includes Jacobs, Carte Noire, and Gevalia, while in China it is best known for Maxwell House. D.E Master Blenders 1753, based in the Netherlands, owns popular European brands such as Douwe Egberts and L’Or. Together, they bring complementary strengths: Mondelez’s global scale and distribution, and DEMB’s strong presence in European specialty and retail coffee markets.

What This Means for the Market

Though Jacobs Douwe Egberts will become one of the largest dedicated coffee companies in the world, it is not projected to surpass Nestlé immediately. However, industry watchers note that the new entity’s singular focus on coffee—as opposed to Mondelez’s broader snack portfolio—could accelerate innovation, marketing, and expansion, particularly in emerging markets and premium segments. The merger signals a strategic bet that consolidation is necessary to compete with Nestlé’s scale and R&D-driven dominance.

Frequently Asked Questions

Which companies are merging to create Jacobs Douwe Egberts?

Mondelez International is merging its coffee business with D.E Master Blenders 1753 B.V. (DEMB), a Dutch coffee company. The new entity is called Jacobs Douwe Egberts and is headquartered in the Netherlands.

How big will the new coffee company be?

The combined company is projected to have annual revenues of $7 billion. Mondelez will hold a 49% stake and DEMB will own 51%.

When is the merger expected to be completed?

The deal is expected to close in 2015, pending approval from regulators.

What are the coffee revenues of Mondelez and DEMB?

In 2013, Mondelez’s coffee business generated $3.9 billion, while DEMB reported $3.4 billion in coffee revenue.

Will the new company be able to beat Nestlé?

Not immediately. The merged company’s $7 billion in revenue is still less than Nestlé’s dominant share, but it aims to be a stronger competitor focused purely on coffee.

What does this mean for consumers?

The merger could lead to more innovation, competitive pricing, and expanded product offerings in the coffee category, especially in global and premium markets.

Recommended FrontStreet Coffee for Blending Inspiration

Explore blends that mirror the strategic merging of strengths seen in the Mondelez–DEMB deal. FrontStreet’s Classic Blend offers balanced Brazilian and African notes with chocolate and citrus brightness—ideal as a base. For depth, try the Black Cocoa Blend with its roasted almond and dark cherry profile, adding boldness. The Speciality Blend highlights Ethiopian Yirgacheffe and Colombian beans for floral and citrus complexity. These beans showcase how diverse origins combine to create something greater—just like two coffee giants uniting. Freshly roasted within 5 days · Orders placed before 17:00 ship the same day · Next-day delivery across most of Guangdong Province.