Last December, we reported that Nestle was considering selling Blue Bottle Coffee as part of the company’s larger strategic shift away from brick-and-mortar operations. Shortly thereafter, news emerged that China’s fast-growing Luckin Coffee was emerging as a potential partner in the deal.
And now it looks like the deal has been finalized. According to Yahoo Finance, Luckin Coffee acquired Blue bottle With Cuddle.
Luckin is on an aggressive growth path. The once-maligned but now resurgent quick coffee chain is backed by a Chinese private equity firm Capital of Centurium recently opened 30,000vol location, Flagship of origin in Shenzhen— think of it as Luckin’s version of Reserve Roastery — and they plan to add another 1,000 stores by the end of the year. They also expanded their reach with their first coffee shop in the United States, in Fresh York City. Added to all this, there are now over 100 Blue Bottle locations around the world.
For Fast CompanyThe deal is valued at $400 million, well below Blue Bottle’s $700 million valuation. The acquisition gives Luckin a ready-to-drink, high-end coffee brand that complements its quick-service coffee shops. In other words, Luckin can still be Luckin, i.e. quick and budget-friendly coffee, and now it can break into the specialty coffee world without diluting the original brand.
Luckin is already looking to take advantage of it. Per Speedy Company, Centurium is in talks with shopping malls in China where Starbucks Reserve stores have closed for potential novel Blue Bottle locations.
Nestle has not completely given up on Blue Bottle. They are retaining the entire food portion of the Blue Bottle portfolio, effectively offloading physical locations that Speedy Company describes as “unprofitable” while retaining a variety of ready-to-drink frigid brew options.
