Nestlé Targets High-End Coffee by Taking Majority Stake in Blue Bottle

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Nestlé SA is buying a majority stake in the premium coffee chain Blue Bottle Coffee as the Swiss giant invests in a fast-growing part of the coffee business and continues to extend its reach through buying niche brands. I'm excited to work with Nestle to take a long-term approach to becoming a global leader in speciality coffee.

The U.S. coffee market continues to rise and Nestle has been focused on expanding its business stateside, selling its Nespresso machines.

The Oakland, California-based company operates shops in the US and Japan and is expected to reach 55 stores by the end of 2017, up from 29 a year earlier, Nestle said in a statement Thursday.

For Nestle, the deal marks an entry into the world of "third-wave" coffee, driven by independent, specialty roasters and fueled by dedicated coffee lovers. Blue Bottle has raised about $120 million over three rounds of funding.

"Blue Bottle Coffee is the biggest brand in specialty coffee in America and Japan today", Index Ventures partner Mike Volpi said in a statement. "Their path to scale is clearly defined and benefits from increasing consumer appreciation for delicious and sustainable coffee".

In 2002, James Freeman gave up on being a professional clarinetist and began pursuing his other passion, roasting coffee.

Nestle is looking to expand its hold of the global coffee market with the acquisition as evidenced by the company's willingness to pay a high price for a top-tier coffee company. "Nestlé's belief in our coffee, our process, and, most importantly, our people, assured us that this is a deal that will enable us to dream longer and further into the future than I previously imagined possible".

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