American coffeehouse chain, Starbucks, and Swiss food and drink company, Nestlé, have strengthened their ongoing collaboration further with today’s launch of new coffee products under the Starbucks brand.
The new range includes: Fresh Brew coffee, Cold Brew concentrate; and Starbucks coffee blends containing golden turmeric and essential vitamins among others. This range allows consumers to satiate their cravings for Starbucks coffee even at home.
The new line-up will be available in US grocery stores nationwide from February 2020.
The new offerings come as part of a $7.1 billion global alliance signed by Nestlé and Starbucks’ 2018. Through the deal, Nestlé has acquired a global license to produce Starbucks-branded products, including ground and roast coffee, as well as portioned and soluble coffee, teas and creamers. However, the arrangement excludes sales of any products – produced as part of the agreement – at any Starbucks outlet. Nestle also took on around 500 Starbucks employees as part of the deal.
The deal kick-started with the duo’s launch of a new line-up in February 2019. The range included 24 products, such as single-origin coffees, signature Starbucks blends and classic preparations like Cappuccino and caramel macchiato, all made using 100% ethically sourced Arabica beans.
The range also marked the debut of Starbucks capsules, which have been developed using Nestlé’s proprietary Nescafé Dolce Gusto and Nespresso technologies.
The partnership is strategically important for both companies which have come together to create a stronger collaboration in the highly fragmented consumer beverages market. The market is seeing a slew of new entrants and an increasing number of mergers, acquisitions and alliances aimed at taking over a bigger share of the global coffee market that is expected to be worth $102.28 billion by 2023.
Transactions such as Coca Cola’s acquisition of Costa and JAB Holdings’ expansion of its coffee portfolio, which included the acquisition of Peet’s Coffee & Tea, Keurig Green Mountain, Caribou Coffee, Jacobs Douwe Egberts and several others, emphasise the growing focus of investors in the coffee segment and the rapid consolidation of the segment.
The coffee market is predicted to undergo significant growth, bolstered by changing urban lifestyle habits, increasing demand for on-the-go food and beverages and increasing customer purchasing power.
Nestle’s Chief Executive Mark Schneider has already identified coffee as a strategic category for investment and the company’s latest developments, including its acquisition of a majority stake in Blue Bottle Coffee, purchase of Texas-based Chameleon Cold-Brew and even the Starbucks deal, all indicate that the Swiss company is well on track to emerge as the top player in the coffee market.
