It will also allow Nestlé to solidify its presence in North America after selling its US confectionery business to Italian confectioner Ferrero and is expected to positively affect Nestlé’s earnings from 2019 onwards.
The Swiss-based company’s grip on the US food retailing sector has been loosened by JAB Holding Co, a leading German F&B company with a number of popular subsidiaries, including Krispy Kreme and Keurig Green Mountain. Nestlé is trying to boost its presence through its coffee segment and the latest deal will secure Starbucks’ young consumer base.
Nestlé has been tapping into the coffee segment’s potential because of the popularity of the beverage among young consumers, buying Texas-based organic coffee company Chameleon Cold-Brew for an undisclosed sum in November 2017. It also acquired California-based Blue Bottle Coffee for US$425 million in September 2017.