Nestlé is going ahead with the sale of the Blue Bottle Coffee chain business as it confirmed Chinese investor Centurium Capital as the buyer.
Blue Bottle Coffee was the subject of media speculation in December suggesting Nestlé had hired advisors to weigh up options for the business, including a possible sale.
Further speculation then emerged in March that private-equity firm Centurium Capital might be the suitor, which has now proved to be the case.
Nestlé buried the confirmation announcement at the foot of its first-quarter results statement today (23 April), saying briefly: “Nestlé has agreed the sale of Blue Bottle Coffee to Centurium Capital. The transaction is subject to the customary conditions and is expected to close during H1-26.”
The Swiss group acquired a controlling interest in Blue Bottle in 2017 in a deal that valued the US business at about $700m. The chain runs around 100 outlets across the US and Asia. It also sells packaged coffee in stores such as Target and Save Mart.
Centurium Capital confirmed the deal with Just Drinks but did not supply a comment or statement.
Nestlé did not put out a full statement on the transaction but CEO Philipp Navratil was asked for more details on a follow-up results discussion with analysts today as coffee outperformed in the opening three months of the year.
The deal is for the sale of the “whole business”, he said, although Nestlé will retain some parts of the business.
“We have Blue Bottle branded capsules on Nespresso that are quite successful and we intend to keep that business sold through Nestlé,” Navratil told analysts. “But all the cafes are obviously in the perimeter of the sale.”
Nestlé delivered a positive set of first-quarter numbers led by coffee, which was described today as the “star” performer. However, the group results were overshadowed by a slowdown in sales linked to this year’s infant formula recall.
Organic growth came in at 3.5%, easing from the 4% pace in quarter four of fiscal 2025 as the recall mainly weighed on sales in Europe and China.
Real internal growth (RIG), which strips out the effect of pricing from organic growth, “was positive across all zones and categories”, Navratil said, adding that coffee “was the star, with recovering volumes and positive mix”.
Organic growth in the coffee division was 9.3% with RIG of 3.5%, outpacing the 1.2% for the group based on total sales of SFr21.32bn ($27.1bn). Coffee delivered SFr6bn in sales, only trailing the SFr6.18bn for food and snacks.
“We love this category because it's a category that is resilient,” Navratil told analysts during today’s Q&A session.
“This is broad-based, the performance on coffee, and it's definitely based on performance across all zones, across almost all markets. And it's strong across all of our brands – Nescafé, Starbucks and Nespresso.”
CFO Anna Manz said the “strength” in Nestlé’s coffee business was evident in the US and “other large coffee markets”, such as Mexico, Brazil, Chile and Canada.
She added that growth in Nespresso “is still led by pricing, which is expected to moderate as we begin to analyse increases from 2025 RIG recovered in the quarter partly due to an increase in active consumers in Europe".
Navratil was asked how Nestlé is embracing younger consumers in coffee, to which he highlighted taking on singer Dua Lipa as the global brand ambassador for Nespresso, or what he described as “influencers”.
“We're speaking to a different cohort of consumers, younger consumers, new consumers that have actually never been in contact with Nespresso, coming in to our website, to our stores, and being interested about the brand.”
In other sale proposals, Nestlé is in the process of selling its stake in its waters business, an area in which Navratil said today “we are making progress”.
He said: “You have seen us going out and looking for partners. We're looking at that as we speak”, adding that is expected “to be consolidated by 2027”.
Nestlé stuck with its financial guidance for the full year for organic growth of “around 3% up to 4%”, RIG “accelerating” against 2025, and expectations that the underlying trading operating profit margin (UTOP) will “improve” from last year’s 16.1%.
“It is clear that geopolitical and macroeconomic uncertainties have increased,” Navratil said as analysts pressed that the outlook might have been more bullish had it not been for the conflict.
Manz explained: “The conflict in the Middle East will have some impact on commodity and distribution costs and possibly on consumer behaviour but it's too early to know the full extent of this.”
