Nestlé and Starbucks announce new global coffee alliance

An exciting fusion of strategic sourcing and supply relationship management expertise has been announced in…...

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An exciting fusion of strategic sourcing and supply relationship management expertise has been announced in the form of a new global coffee alliance between two giants of the industry: Nestlé and Starbucks.

Under the agreement, which is awaiting regulatory approval, Starbucks will take the lead in strategic sourcing while Nestlé will use its consumer goods and opportunity assessment expertise to introduce Starbucks-branded products to new outlets and international markets.

Nestlé has agreed to pay $7.15bn to licence the Starbucks brand. This move permits Nestlé to harness its dominant position as one of the biggest food manufacturers on the planet to extend Starbucks products to a range of new consumer outlets, including a multitude of the food leviathan’s Nespresso pods. The payback for Nestlé is that it sees the move as a powerful means of raising its coffee presence in food services.

Announcing the development, Starbucks CEO and president Kevin Johnson said:

“This global coffee alliance will bring the Starbucks experience to the homes of millions more around the world through the reach and reputation of Nestlé.”

“This historic deal is part of our ongoing efforts to focus and evolve our business to meet the changing consumer needs, and we are proud to work alongside a company that is committed to our shared values.”

Expressing his delight in the Starbucks partnership, Nestlé CEO Mark Schneider explained that the deal marked a major step forward for the organisation’s largest high growth category: its coffee business. The alliance, he added, brings together three of the most iconic brands in the global coffee industry: Starbucks, Nescafé and Nespresso. Both companies, he continued, “have true passion for outstanding coffee and are proud to be recognised as global leaders for their responsible and sustainable coffee sourcing.”

Both companies are hopeful that the agreement will meet with regulatory approval either during the summer or in early autumn.

Steve Trainor

Steve has over 28 years of success as CPO, MD and Procurement BPO leader in a range of industries. Steve is COO at Odesma, responsible for Odesma’s delivery capability & infrastructure.

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