Oakland-based Blue Bottle announces plans to sell stake to Nestle

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Locally-based Blue Bottle Coffee announced plans Thursday to sell a majority stake to Swiss food giant Nestle. (KGO-TV)

It's a locally based company with a cult-like following. Blue Bottle Coffee announced plans Thursday to sell a majority stake to Swiss food giant Nestle.

"This has just been one incredible moment after another," said James Freeman, who founded Blue Bottle in Oakland nearly 15 years ago, and built the company from the ground up.

Nestle owns a portfolio of nearly 2,000 brands including Kit Kat, Stouffer's and Purina.

Freeman personally told his employees of Blue Bottle's decision to sell. Some expressed their initial concerns. "Are we going to have to use this water, or that chocolate, or this ingredient, and the answer is most emphatically, no," said Freeman. "We have complete autonomy over the ingredients we choose."

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Swiss-based Nestle, which already owns coffee brands Nescafe and Nespresso, says Oakland, California-based Blue Bottle will help it boost its coffee business in the United States.

Blue Bottle currently operates dozens of cafes in the Bay Area, New York, Los Angeles, Washington, D.C. and Tokyo with immediate plans to open more locations on the East Coast by the end of the year. The popular coffee chain will operate independently from Nestle with a separate board. "They just go the extra mile to extract all that beautiful flavor that's already there in the coffee," said Oakland resident Stephen Dickey.

The announcement comes after two other Bay Area beverage makers were two bigger companies earlier this year. San Francisco's Anchor Brewing is now owned by Sapporo. Petaluma-based Lagunitas was sold to Heineken.

Some coffee enthusiasts have been expressing their disappointment over the news at local Blue Bottle cafes, as well as on social media. "For it to be taken over by something big and something corporate, it loses that luster," said San Francisco resident June Cuaresma. "It loses that shine and it really loses that local flavor for me."

Bryan Meehan, Blue Bottle's CEO for the past two years, said customers can continue looking forward to a high-quality experience at all of the company's cafes. "I think our guests are going to have a better future of Blue Bottle with Nestle as an investor, than by having thousands of hedge funds invest short term in Blue Bottle as public company," said Meehan, who with Freeman, will continue to serve on the company's executive leadership team.

Nestle will control 68-percent of the company. Current management and employees will retain the remaining 32-percent. Financial details were not disclosed, but the deal is expected to close by the end of October.

Related Topics:
businesscoffeeacquisitionnestle foodsu.s. & worldOaklandSan Francisco
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