Nestlé S.A. (SWX:NESN) has reportedly hired advisers to weigh up the options for its Blue Bottle Coffee chain. According to Reuters, the Swiss giant has appointed investment bank Morgan Stanley to work on moves that could include a sale. Nestlé acquired a controlling interest in Blue Bottle in 2017 in a deal that valued the US business at about $700 million.
Blue Bottle runs around 100 outlets across the US and Asia. In addition to its café network, the brand sells packaged coffee. In the US, Blue Bottle's coffee products are available at grocery chains including Target and Save Mart.
Nestlé CEO Philipp Navratil is two months into his tenure at the top job at the world's largest food maker. In September, he was promoted from CEO of Nestlé?s coffee business Nespresso to replace Laurent Freixe who was dismissed after an ?undisclosed romantic relationship with a direct subordinate?. A month later, Nestlé set out plans to cut 16,000 jobs ?
12,000 white-collar workers across the group, plus 4,000 in manufacturing and within the supply chain ? over the next two years. ?The world is changing and Nestlé needs to change faster.
This will include making hard but necessary decisions to reduce headcount over the next two years,? Navratil said at the time. Speaking to analysts after the announcement, Navratil indicated he would be reviewing Nestlé's portfolio.
"We must have a winning portfolio. I?ll be looking at everything in a rational way. Where we aren?t performing, I will act and act with urgency," he said.
"I look at assessing business on four key questions: Is this a growth category? Is the returns profile attractive? Are we positioned to win?
And are we actually winning? Across most of the portfolio, the answer to these questions is yes ? although we are not yet winning as much as we need to.
But if our assessment concludes that one or the other business does not meet the criteria I described, we will act, whether that means fixing, partnering or selling." The reported deliberations over Blue Bottle would follow discussions Nestlé has had over other assets in recent months.
Nestlé S.A. is the world's leading agri-food group. Net sales break down by category of products as follows:
- powdered and liquid beverages (26.9%): soluble coffees (Nescafé and Starbucks brands), coffee in capsules (Nespresso), chocolate drinks (Nesquik, Milo, etc.), tea drinks (Nestea), etc.;
- pet food (20.7%): brands such as Purina, Friskies, Felix, etc.;
- pharmaceutical, nutrition and well-being products (16.6%): nutritional supplements (Resource, Boost, Nutren, Optifast, Peptamen brands, etc.), infant and maternal nutrition products (NAN, illuma, Cerelac, Nido, Gerber), ketogenic beverages (BrainXpert), (Nesquick, Fitness, Cheerios, Lion, etc.), etc.;
- ready meals and seasoning products (11.7%): frozen and chilled dishes (Lean Cuisine, Hot Pockets and Stouffer's brands), soups (Maggi), etc.;
- dairy products and ice cream (11.4%): powdered milk, sweetened condensed milk, yoghurt and cream desserts, ice cream (Nido, Nesvita, Carnation, La Laitière, Coffee Mate, Nestlé Ice Cream, Dreyers, Häagen-Dazs, Extrême brands, etc.);
- chocolates, sweets and biscuits (9.2%): Kit Kat, Smarties, Cailler, Terrafertil, etc. brands;
- bottled waters (3.5%): Nestlé Pure Life, Vittel, Perrier, S. Pellegrino, etc. brands.
Net sales are distributed geographically as follows: Switzerland (1.2%), the United Kingdom (4%), France (3.8%), Germany (2.2%), Europe (13.1%), the United States and Canada (35.2%), China (5.9%), Brazil (4.4%), Mexico (4.2%), Chile (1.2%), Latin America (3.8%), Philippines (2.9%), India (2.2%), Australia (1.6%) and Oceania (14.3%).
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