Nestlé and Starbucks have closed a $7 billion deal that offers Nestle the licensing rights to market, sell and distribute Starbucks brand packaged coffee and tea.
The new licensing agreement includes the rights to market everything from the whole bean coffee to portioned coffee pods for each brand owned by Starbucks.
The partnership will bring together the brands owned by both companies. Nestle’s biggest brands include Nescafé, Nespresso and Dolce Gusto. Starbucks’ brands include Starbucks Seattle’s Best Coffee, Starbucks Reserve, Teavana and Torrefazione Italia.
“This partnership demonstrates our growth agenda in action, giving Nestlé an unparalleled position in the coffee business with a full suite of innovative brands,” said Nestlé CEO Mark Schneider.
Starbucks CEO Kevin Johnson has said that the deal opens the door for the chain, with more than 25,000 locations around the world - to reach a global scale in the retail sector as well.
“This global coffee alliance with Nestlé is a significant milestone for the growth of Starbucks,” said Johnson. “Bringing together the world’s leading coffee retailer, the world’s largest food and beverage company and the world’s largest and fast-growing installed base of at-home and single-serve coffee machines helps us amplify the Starbucks brand around the world while delivering long-term value creation for ur shareholders.”