Nestle S.A. and Starbucks Corp. on Aug. 28 finalized a transaction that grants Nestle the perpetual global license to market, sell and distribute certain Starbucks coffees and teas at retail and food service outlets outside of Starbucks stores around the world. The agreement does not include Starbucks’ ready-to-drink products, which are subject to other licensing agreements, or sales of any products within Starbucks coffee shops.
The two companies said the alliance will allow them to work closely on Starbucks’ existing range of roast and ground coffee, whole beans, and instant and portioned coffee.
The $7.15 billion agreement first was announced on May 7.
“This partnership demonstrates our growth agenda in action, giving Nestle an unparalleled position in the coffee business with a full suite of innovative brands.” — Ulf Mark Schneider, Nestle
“This partnership demonstrates our growth agenda in action, giving Nestle an unparalleled position in the coffee business with a full suite of innovative brands,” said Ulf Mark Schneider, chief executive officer of Nestle. “With Starbucks, Nescafé and Nespresso we bring together the world’s most iconic coffee brands. The outstanding collaboration between the two teams resulted in a swift completion of this agreement, which will pave the way to capture further growth opportunities.”
The business that Nestle is acquiring has annual sales of approximately $2 billion. The agreement is expected to significantly strengthen Nestle’s coffee portfolio in the North American premium roast and ground and portioned coffee business and also will unlock global expansion opportunities in grocery and food service for the Starbucks brand.
“This global coffee alliance with Nestle is a significant strategic milestone for the growth of Starbucks,” said Kevin Johnson, president and c.e.o. of Starbucks. “Bringing together the world’s leading coffee retailer, the world’s largest food and beverage company, and the world’s largest and fast-growing installed base of at-home and single-serve coffee machines helps us amplify the Starbucks brand around the world while delivering long-term value creation for our shareholders.”