Oakland-based coffee chain Blue Bottle announced Thursday, Sept. 14, it will sell a majority stake (68%) to Swiss food company Nestlé. Blue Bottle, which was founded in 2002 by James Freeman, who started selling coffee out of a 183-foot kiosk, will keep its headquarters in Oakland. It will still operate as a stand-alone entity. Freeman, who is now chief product officer for the business, and CEO Bryan Meehan will also continue to lead the company.
Blue Bottle is credited with helping launch the third wave coffee movement in the United States, introducing pour-over coffee and single-origin beans to the masses. Since it opened 15 years ago, Blue Bottle has rapidly expanded, opening in the Bay Area, New York and Tokyo. It continues to look for more locations. In June, it opened a new café in Old Oakland, where it moved its training program from its Jack London Square facilities. It also has plans to open a production facility in West Berkeley this year, within the old Pyramid Brewery space. As reported on Nosh, Blue Bottle will take up 7,500 square feet in this space to make the coffee company’s popular cold brew cans. The company has a goal of opening 25 new cafes this year, and will open new locations in Washington, D.C., Miami and Boston.
According to Business Insider, Nestlé is dropping $500 million for the majority stake; Blue Bottle is valued at more than $700 million.
Blue Bottle explained in a press release announcing the sale that the deal with Nestlé will allow it to continue to grow in many ways, including in coffee technologies, employee opportunities and benefits, new cafés and roasteries, its international reach through its digital program and its consumer packaged-goods line, including its NOLA iced coffee cartons, cold brew cans and pre-ground coffee.
The move for Nestlé means legitimacy, a way in on what it sees as a consumer trend it hopes will continue to grow. Nestlé CEO Mark Schneider said in a press release announcing the sale, “Blue Bottle’s passion for quality coffee and mission-based outlook make for a highly successful brand. Their path to scale is clearly defined and benefits from increasing consumer appreciation for delicious and sustainable coffee.” Nestlé currently already sells coffee under its Nescafé and Nespresso lines but, by acquiring Blue Bottle, it’s tapping into a whole new market.
Even before the announcement of the sale, Blue Bottle has caused some consumers to worry that the chain is growing too fast and becoming too corporate. In 2017, residents and the Planning Commission in San Francisco’s Lower Haight blocked Blue Bottle from opening a café at 201 Steiner St., an empty storefront once occupied by beloved neighborhood café Bean There. The commission made its decision based on Blue Bottle owning 34 locations around the world at the time; San Francisco defines “formula retail” as a business with more than 11 locations. Critics of Blue Bottle worry that its cafés are competing against small local coffee shops and replacing community character with a sterile, formulaic chain store. The sale to Nestlé will undoubtedly spark more debate and opposition from its detractors.