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MarketScreener Homepage  >  Equities  >  Swiss Exchange  >  Nestlé S.A.    NESN   CH0038863350

NESTLÉ S.A.

(NESN)
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Nestle S A : starts selling Starbucks-branded coffee in China

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08/08/2019 | 02:51am EDT
Starbucks China CEO Belinda Wong attends a news conference of Nestle start selling Starbucks-branded coffee in China, in Shanghai

SHANGHAI (Reuters) - Food giant Nestle on Thursday started selling Starbucks-branded coffee in mainland China, seeking to tap growth in a market where it says coffee consumption per capita remains low compared to global standards.

Nestle last year paid $7.15 billion for exclusive rights to sell the U.S. chain's coffees and teas globally, and began selling Starbucks-labelled products in Europe, Asia and Latin America in February.

The world's largest food company will start selling 21 Starbucks-branded capsule and instant coffee products on Chinese e-commerce platforms like Alibaba's Tmall and JD.com, as well as to offices and hotels in tier-1 cities, both companies said.

"We believe China is the most exciting market in general but especially for coffee because... per capita cup consumption is quite low as compared to Asia," said Rashid Aleem Qureshi, Nestle's chief executive officer for the Greater China region.

"Right now the overall soluble coffee in China is growing between 3-5% (a year) and we believe that by bringing this exciting new business opportunity we should be able to grow faster than that," he said, referring to a category that includes capsule and instant coffee.

Nestle's move comes as the Swiss company experienced a slower first-half growth in China, its second-largest market, where other categories like mainstream baby foods have struggled compared to pricier options.

China's per capita coffee consumption is about 6 cups a year, compared to 400 in Japan and 300 in South Korea, Nestle said.

The partnership with Starbucks would help Nestle add a premium coffee option to the range of products it already sells in China, such as Nescafe instant coffee range and Nespresso capsule coffees, Qureshi said.

Starbucks China CEO Belinda Wong said the Nestle deal would open two new avenues to sell its products in China, where it has been investing heavily in its store network and delivery amid tougher competition from local startups.

(Reporting by Brenda Goh; Editing by Subhranshu Sahu)

Stocks treated in this article : London Coffee, Nestlé S.A.
Stocks mentioned in the article
ChangeLast1st jan.
LONDON COFFEE -1.07% 1765 End-of-day quote.0.00%
NESTLÉ S.A. -0.90% 106.26 Delayed Quote.34.36%
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Financials (CHF)
Sales 2019 94 147 M
EBIT 2019 16 629 M
Net income 2019 12 469 M
Debt 2019 30 922 M
Yield 2019 2,51%
P/E ratio 2019 25,3x
P/E ratio 2020 23,9x
EV / Sales2019 3,59x
EV / Sales2020 3,50x
Capitalization 307 B
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Mean consensus OUTPERFORM
Number of Analysts 27
Average target price 111,34  CHF
Last Close Price 107,22  CHF
Spread / Highest target 13,8%
Spread / Average Target 3,85%
Spread / Lowest Target -17,9%
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Ulf Mark Schneider Chief Executive Officer & Director
jeff hamilton President
Paul Bulcke Chairman
Magdi Batato Executive Vice President-Operations
François-Xavier Michel Marie Roger Chief Financial Officer & Executive Vice President
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