Starbucks extends RTD coffee partnership with Nestlé to expand global reach of its brand

ASIA/LATIN AMERICA Starbucks is eyeing a bigger share of the global RTD coffee market and has entered a partnership with Nestlé to bring ready-to-drink (RTD) coffee beverages to select markets across Southeast Asia, Oceania, and Latin America as from 2022 through a variety of channels, including online platforms. 

The deal will initially focus on its most popular products such as Starbucks Frappuccino and Starbucks Doubleshot but will be expanded to include more products as the two companies have agreed to continue developing new and innovative products under the licencing agreement. 

As the world’s largest food company, Nestlé has a presence in over 187 countries in the world, giving it a market reach than few companies can enjoy, making it an ideal partner for Starbucks.

“With its historical local footprint and exceptional execution capabilities, Nestlé is an ideal partner to help us develop and offer tailored Starbucks coffee beverages in these regions,” said Michael Conway, group president of international and channel development at Starbucks. 

Starbucks has a history of working with Nestlé which dates back to 2018 when Nestlé purchased the exclusive rights to market Starbucks coffees and teas around the world. 

Since then, the companies have released a variety of products including whole bean, roast and ground coffee, refrigerated coffee creamers, cold brews, as well as Starbucks capsules for Nespresso and Nescafé Dolce Gusto systems. 

These product launches have been a success, positively impacting Nestle’s product portfolio and full-year revenues for 2020. 

In the company’s 2020 full-year results, sales of Starbucks products stood at CHF 2.7 billion (approx. $2.94 billion), representing double-digit organic growth compared to 2019. 

This acceleration continued in the first quarter of 2021, as coffee proved to be the largest contributor of growth to Nestle’s revenue due to strong demand in at-home channels. 

David Rennie, head of Nestlé coffee brands, added: “With our expansion plans into RTD coffee, Nestlé will continue to build on its global leadership in coffee and will benefit from new growth opportunities in a segment that is developing rapidly and attracting new and younger consumers.” 

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Earlier, Nestlé announced that it is investing US$70 million in upgrading facilities at its Burlington, USA plant to enable it begin the production of Nestle Toll House refrigerated cookie dough. 

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