Nestlé to buy coffee brand from Starbucks

Nestlé formed a coffee partnership with Starbucks in 2018. © Keystone / Gaetan Bally

Swiss food manufacturing company Nestlé has announced it will buy the Starbucks subsidiary company ‘Seattle’s Best Coffee’ amid flagging sales of its other coffee brands.

The takeover of the United States coffee retailer for an undisclosed sum is expected to be finalised by the end of the year, Nestlé announced on Wednesday.

Seattle’s Best Coffee was founded in 1970 and was absorbed into the Starbucks group in 2003.

In 2018, Nestlé bought the rights to distribute several Starbucks brands around the world under an agreement called the Global Coffee Alliance. The total global sales of Starbucks products distributed by Nestlé in 2021 reached CHF3.1 billion ($3.1 billion).

Nestlé group, which makes a variety of foods and beverages including KitKat and Nespresso, saw sales climb 9.2% to CHF69.1 billion in the first nine months of this year, boosted by price hikes across its range of products.

But coffee sales have shrunk from double digit percentage growth in 2021 to single digits so far this year. Sales of its flagship Nespresso coffee pods have grown just 0.4% to 4.7 billion.