In a significant development for the coffee industry, Nestlé has confirmed the sale of its Blue Bottle Coffee chain to Chinese investor Centurium Capital. This decision follows months of speculation and could herald a new chapter for the popular coffee brand.
Nestlé is going ahead with the sale of the Blue Bottle Coffee chain business as it confirmed Chinese investor Centurium Capital as the buyer.
Blue Bottle Coffee was the subject of media speculation in December suggesting Nestlé had hired advisors to weigh up options for the business, including a possible sale.
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Further speculation then emerged in March that private-equity firm Centurium Capital might be the suitor, which has now proved to be the case.
Nestlé buried the confirmation announcement at the foot of its first-quarter results statement today (23 April), saying briefly: “Nestlé has agreed the sale of Blue Bottle Coffee to Centurium Capital. The transaction is subject to the customary conditions and is expected to close during H1-26.”
The Swiss group acquired a controlling interest in Blue Bottle in 2017 in a deal that valued the US business at about $700m. The chain runs around 100 outlets across the US and Asia. It also sells packaged coffee in stores such as Target and Save Mart.
Just Drinks has asked Centurium Capital to confirm the deal.
Nestlé did not issue a full statement on the transaction, but CEO Philipp Navratil addressed questions about it during a follow-up discussion with analysts today, noting that coffee sales had performed well in the first quarter.
The deal encompasses the “whole business,” he stated, but Nestlé will retain some parts of it. “We have Blue Bottle branded capsules on Nespresso that are quite successful and we intend to keep that business sold through Nestlé,” Navratil explained. “But all the cafes are obviously in the perimeter of the sale.”
Nestlé recently reported a positive first-quarter performance, with coffee being described as the “star” performer. However, overall group results faced challenges due to a slowdown in sales associated with an infant formula recall this year.
Organic growth for Nestlé was at 3.5%, down from 4% in the fourth quarter of fiscal 2025, as the recall primarily impacted sales in Europe and China.
Real internal growth (RIG), which excludes pricing effects from organic growth, “was positive across all zones and categories,” Navratil noted, adding that coffee “was the star, with recovering volumes and positive mix.”
Organic growth in the coffee division reached 9.3%, with a RIG of 3.5%, surpassing the group total sales growth of 1.2% for the overall figure of SFr21.32bn ($27.1bn). Coffee sales amounted to SFr6bn, only slightly behind the SFr6.18bn generated from food and snacks.
“We value this category because it demonstrates resilience,” Navratil observed during the Q&A session with analysts.
“The performance in coffee is broad-based and reflects strong results across all zones, nearly all markets, and across all our brands – Nescafé, Starbucks, and Nespresso.”
CFO Anna Manz emphasized that Nestlé’s coffee division showed strength particularly in the US and significant coffee markets including Mexico, Brazil, Chile, and Canada.
She added that growth in Nespresso “is still led by pricing, which is expected to moderate as we begin to analyze increases from 2025, with RIG recovering partly due to an increase in active consumers in Europe.”
When discussing how Nestlé is appealing to younger consumers in the coffee market, Navratil highlighted the partnership with singer Dua Lipa as the global brand ambassador for Nespresso, acknowledging her influence over a younger demographic. He stated, “We’re engaging a new cohort of consumers who are interacting with our brand for the first time.”
Nestlé is also pursuing the sale of its stake in its waters business, an area in which Navratil noted progress is being made.
He remarked, “You have seen us actively seeking partners. We’re looking at that as we speak,” with expectations for consolidation by 2027.
Nestlé maintained its full-year financial guidance, projecting organic growth of “around 3% up to 4%,” and RIG “accelerating” against 2025, alongside expectations that the underlying trading operating profit margin (UTOP) will “improve” from last year’s 16.1%.
“The geopolitical and macroeconomic uncertainties have undeniably increased,” Navratil said, particularly in light of analyst questions suggesting a more optimistic outlook might have been possible without the present conflicts.
Regarding potential impacts, Manz explained, “The conflict in the Middle East will have some impact on commodity and distribution costs and possibly on consumer behavior, but it’s too early to determine the full extent of this.”
Key Takeaways
- Nestlé is selling Blue Bottle Coffee to Centurium Capital.
- The confirmed transaction is set to close in the first half of 2026.
- Blue Bottle operates approximately 100 locations across the US and Asia.
- The coffee division saw significant growth, with organic growth at 9.3%.
- Nestlé aims to retain some coffee-related businesses, such as branded capsules for Nespresso.
- The sale reflects Nestlé’s ongoing strategy to streamline its portfolio amid changing market dynamics.
FAQ
What is Blue Bottle Coffee?
Blue Bottle Coffee is a specialty coffee chain known for its quality brews and trendy cafes.
Who is Centurium Capital?
Centurium Capital is a private-equity firm based in China that specializes in investments across various sectors.
When will the sale be finalized?
The sale is expected to close in the first half of 2026, subject to customary conditions.
How many locations does Blue Bottle Coffee have?
Blue Bottle currently operates around 100 outlets across the US and Asia.
What impact will the sale have on Nestlé’s coffee business?
Nestlé will retain certain segments of its coffee business while selling the cafes and related operations.
