Nestlé is launching a strategic review of its specialty coffee business and, according to three sources familiar with the matter, has appointed Morgan Stanley to analyze various options for Blue Bottle Coffee, including a potential divestment. The transaction is part of a broader portfolio rationalization initiated by new CEO Philipp Navratil, which aims to simplify the group's structure and gradually exit the brick-and-mortar business, in line with a trend already observed in the sector.
The Swiss giant acquired a majority stake in Blue Bottle in 2017, valuing the Californian brand, known for its premium positioning and strong identity in the drip coffee segment, at around $700 million. Sources indicate that a potential sale could be made at a lower valuation than the original. Meanwhile, Coca-Cola is also exploring options for its Costa Coffee chain.
Neither Nestlé nor Morgan Stanley have commented on the pending transaction. The move is part of a broader strategy: in July, the group began a review of its vitamin and supplement businesses—including Nature's Bounty, Osteo Bi-Flex, Puritan's Pride, and its U.S. private label business—and is preparing to divest its water business, which includes global brands such as Perrier and S.Pellegrino.
Blue Bottle currently has around 100 locations in the United States and Asia and also sells branded products such as ground coffee and accessories. One source reports that Nestlé may be considering a hybrid solution: selling the café network while retaining the intellectual property to continue developing the brand in retail and e-commerce.
Founded by James Freeman in 2002 in Oakland and rapidly growing in the West Coast specialty coffee scene, Blue Bottle has long been considered one of the most iconic premium coffee brands. Nestlé's core brands remain Nescafé and Nespresso, which represent the heart of the group's global business.
The final decision on Blue Bottle's future will be made in the coming months, as the group continues to review its portfolio to focus investments and resources on brands with greater scale, profitability, and international growth potential.
