Nestlé takes its coffee upscale with Blue Bottle Coffee
Over the last several quarters, we’ve witnessed larger breweries scoop up smaller, craft brewers with the goal of not only buying market share but also tapping into products that consumers are favoring. We are starting to see that happen in Big Food with Danone acquiring White Wave and now Nestle taking an interest in premium coffee company Blue Bottle Coffee. Several of team Tematica have sampled Blue Bottle’s hot and cold coffees, and in our view, they are a clear-cut example of an Affordable Luxury. Just so we’re all on the same page, we define an Affordable Luxury as a premium product or service that makes consumers feel like they are splurging, but it’s priced so that splurge can be fit into their weekly budget. A slice of heaven that doesn’t break the bank.
There’s a very big difference between a cup of lukewarm Nescafé instant coffee and a cup of freshly roasted pour-over coffee, yet the same parent company will be able to bring give you both. Nestlé has reportedly paid around $500 million for 68% of the Brooklyn-based roastery Blue Bottle.
Acquiring millennials, er, coffee brandsNestlé will have the option to acquire the remaining 32% of the company if Blue Bottle reaches certain unspecified goals, and says that the brand will be allowed to function independently. The company’s founder, a former professional clarinet player who turned his coffee-roasting hobby into a worldwide business, will stay on, as will the current CEO.
In an interview with the Financial Times, which broke the story, Nestlé marketing director Patrice Bula was pretty honest about why it acquired the company: It wants expertise in what’s currently considered premium coffee, and it wants to be part of a market that’s actually growing among millennial customers.
Source: Nestlé Pays $500 Million For 68% Of Blue Bottle Coffee – Consumerist
