Nestle Acquires U.S. Coffee Brand Chameleon Cold-Brew
November 03 2017 - 2:18PM
Dow Jones News
By Saabira Chaudhuri
Nestle SA has acquired its second niche American coffee brand in
recent weeks, as the packaged foods giant makes good on its promise
to push into higher-growth coffee segments.
Nestle on Friday said it has acquired Chameleon Cold-Brew, a
craft coffee brand based in Austin, Texas, that makes multi-serve
concentrates and single-serve ready-to-drink products, two segments
Nestle says account for 18% of the $2.5 billion in-home coffee
category.
"The Chameleon brand is perfectly positioned to support Nestle's
strategy for coffee, which is to have a variety of offerings in
terms of format, taste and price points," said Nestle's U.S. head
Paul Grimwood.
Chameleon also sells kegs, cold-brew kits and whole-bean coffee.
Its coffee is sold at U.S. chains such as Whole Foods, Target,
Safeway, Albertson's and Bed, Bath & Beyond.
The deal comes after Nestle in September said it was buying a
majority share in specialty coffee roaster and retailer Blue Bottle
Coffee.
The coffee industry has been marked by consolidation in recent
years as large players such as Nestle and European investment firm
JAB Holding Co. see an opportunity in more premium drinks. Last
year a JAB-led investor group completed its acquisition of Keurig
Green Mountain Inc. for about $14 billion. In 2015, JAB paid
roughly $5 billion for control of Mondelez Inc.'s coffee business.
It also owns Peet's Coffee & Tea, and Danish coffee-bar chain
Baresso Coffee A/S.
The U.S. coffee category climbed 30% by value to $13.3 billion
last year from $10.2 billion in 2011 according to Euromonitor.
Nestle has highlighted its interest in developing both out-of-home
offerings and cold coffee, two areas it says are seeing strong
growth.
Nestle Chief Executive Mark Schneider has promised to shuffle
about 10% of the company's portfolio, saying that he plans to focus
investments on coffee and other core areas. In September he told
investors that Nestle sees an opportunity to take cold-coffee
brands, already popular in the U.S., to emerging markets with hot
climates.
"This whole notion of serving something that's ready-to-drink
right away and that's chilled is going to be very important to us
and we're pursuing it aggressively," he said. "As we approach the
coffee business on a global basis, we're not going to be
Eurocentric."
Blue Bottle, which has 43 cafes in the U.S. and one in Tokyo,
offers a ready-to-drink cold coffee variety that Mr. Schneider said
Nestle intends to "build on aggressively."
Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com
(END) Dow Jones Newswires
November 03, 2017 14:03 ET (18:03 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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