Nestlé Exploring Potential Sale Of Blue Bottle Coffee Chain – CoffeeTalk

Swiss food giant Nestlé (NESN.S) is reportedly working with investment bank Morgan Stanley (MS.N) to evaluate options for its Blue Bottle Coffee chain, including a potential sale. This strategic review is part of a broader initiative led by the new Chief Executive Philipp Navratil, aiming to streamline the company’s portfolio and exit the business of operating physical retail locations—reflecting a larger trend in the industry towards reducing physical presence in favor of more profitable avenues.

Nestlé acquired a majority stake in Blue Bottle Coffee in 2017, which valued the premium coffee brand at approximately $700 million, known for its high-quality drip coffee. However, sources close to the situation indicate that any potential sale would likely occur at a valuation lower than this initial figure. In a similar vein, Coca-Cola (KO.N) is also considering divesting its coffee chain, Costa Coffee. Both Nestlé and Morgan Stanley have declined to comment on the matter.

Earlier in July, Nestlé had already initiated a strategic review of several vitamin brands including Nature’s Bounty, Osteo Bi-Flex, and Puritan’s Pride, alongside plans to divest its water division, which encompasses well-known brands like Perrier and S.Pellegrino.

Currently, Nestlé operates about 100 Blue Bottle locations throughout the U.S. and Asia. In addition to café operations, the company markets Blue Bottle-branded products, such as coffee grounds and mugs. There is speculation that, should a sale occur, Nestlé may opt to divest the café operations but retain the brand’s intellectual property to continue selling its product line. Blue Bottle Coffee was founded in 2002 by James Freeman in Oakland, California, with the first retail location opening in 2005 in San Francisco.

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