Nestlé To Sell Starbucks Coffee Globally In $7.2B Deal, But Concerns Are Brewing

Starbucks will provide Nestlé with the right to distribute its coffee and tea products in a deal valued at approximately $7.2 billion. Starbucks will retain a significant stake as licensor and supplier of roast and ground coffee, as well as certain other products.

Starbucks operates over 28,000 locations worldwide, but this partnership will bring the brand to regions where its retail presence is weak.

The chain operates 60% of its cafés in the Americas, 11 percent in Europe, the Middle East and Africa, and 28% in China and the Asia Pacific region.

Awareness of Starbucks’ presence at fast-moving consumer goods retailers is “nascent in all countries outside of North America,” said Kevin Johnson, President and CEO of Starbucks in a conference call with investors.

Putting Starbucks products on Nestlé platforms, including Nespresso and Dolce Gusto single-serve machines, will serve as a brand amplifier for Starbucks as a whole.

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