Starbucks has agreed to sell its Seattle’s Best Coffee brand to Nestle.
The coffee company acquired Seattle’s Best nearly two decades ago as a secondary brand that targeted areas where its more “premium coffee” core business would not get the same support, with plans to expand the concept through retail, franchising and licensing. At one stage the company planned to expand the physical store network from around 3000 stores to 30,000, spread over 11 international markets.
Over time, only the wholesale coffee business is left, although Seattle’s Best has been sold through stores-in-stores and as branded coffee through partner fast-food chains.
In 2018, Starbucks made a deal with Nestle to form the “Global Coffee Alliance,” in which Nestle would package and sell Starbucks’ various brands for retail consumption, including Seattle’s Best.
Michael Conway, group president of Starbucks International and Channel Development, said Nestle would help grow Seattle’s Best as Starbucks changes its strategy.
“We’re confident that Nestlé will continue to grow Seattle’s Best Coffee brand as we focus on our strategy to elevate the premium coffee experience for consumers through the Starbucks brand,” said Conway.
The company’s new strategy includes more drive-thru only and pick-up stores – 2000 in all – and machines that can boost the efficiency of baristas. The plan costs US$450 million and will be rolled out beginning next year through to 2025.
“Our partnership with Starbucks has confirmed Nestlé’s leading position in the dynamic and growing global coffee market,” said David Rennie, head of Nestlé coffee brands.
“With the well-known Seattle’s Best Coffee brand, we will continue building our leadership in coffee by offering consumers more choices for everyday coffee.”
The companies did not disclose the terms and price of the transaction, which will be subject to regulatory and board approval. Starbucks expects the transaction to close by the end of the year.