Switzerland’s Nestlé seals deal to market Starbucks coffee

Nespresso maker Nestlé on Tuesday said it has sealed a deal to market the products of US coffee giant Starbucks around the world, outside of its cafes.

Switzerland's Nestlé seals deal to market Starbucks coffee
The Nespresso SoHo Boutique in New York. File photo: AFP

Swiss food giant Nestlé, which also produces Nescafe instant coffee, had announced in May it would pay $7.15 billion (€6.13 billion) for the rights to market Starbucks coffee globally.

Under the deal, some 500 Starbucks employees in the United States and Europe will join Nestlé, the Swiss company said in a statement.

“With Starbucks, Nescafe and Nespresso we bring together the world's most iconic coffee brands,” Nestlé CEO Mark Schneider said.

“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,” he added.

Read also: Swiss giant Nestlé makes $2.8 billion sweet deal with Ferrero

According to the statement, the deal will significantly boost Nestlé's portfolio in North America.

Bloomberg News said Nestlé has struggled in the US for years.   

Under Schneider's leadership, Nestlé has made coffee a key priority in its growth strategy, particularly in the US.

Since the CEO took over in January 2017, the group has bought a majority stake in California-based high-end brand Blue Bottle Coffee and acquired Texan brand Chameleon Cold Brew.

Starbucks CEO Kevin Johnson said his firm is also set for a major boost under the deal. 

“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,” Johnson said.

Read also: Nespresso says wife and Rome café inspired 'pod'


UK’s Costa Coffee to launch in Switzerland in 2020

UK high street chain Costa Coffee is set to arrive in Switzerland in 2020, according to the company’s owners.

UK's Costa Coffee to launch in Switzerland in 2020
Costa Coffee was founded in 1971 in London. Photo: AFP

Costa Coffee is the UK’s largest coffee shop chain with over 2,000 outlets in the UK and around 1,200 locations around the rest of the world.

In January, the coffee giant was snapped up by Coca-Cola HBC for just over $5 billion.

Read also: Where is the cheapest coffee in Switzerland?

Now its new owner wants to muscle in on the lucrative coffee market with plans to open Costa Coffee outlets in at least ten countries next year, including Switzerland.

Costa Coffee’s arrival in Switzerland could provide stiff competition for US giant Starbucks which has been present in the Swiss market since 2001 and now has around 60 stories across the country.

Coca-Cola HBC bottles the famous soft drink for 28 markets. Its headquarters are based in the tax-friendly Swiss canton of Zug.

In 2018, Swiss food giant Nestlé closed a $7.5 billion deal to market Starbucks products globally.

Read also: Coffee 'not essential' for human survival, says Switzerland