Nestlé signs $7.1bn licensing deal to sell Starbucks coffee

Nestlé and Starbucks have completed a licencing deal that grants the Swiss food giant a ‘perpetual global license’ to sell Starbucks’ coffee and teas around the globe.

The closure of the US$7.15bn deal will allow Nestlé to market Starbucks' consumer packaged goods and foodservice products outside of Starbucks coffee shops.

The Swiss firm will also be able to produce Starbucks coffee branded pods for its Nespresso machines.

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"This partnership demonstrates our growth agenda in action, giving Nestlé an unparalleled position in the coffee business with a full suite of innovative brands,” said Mark Schneider, Nestlé CEO.

“With Starbucks, Nescafé and Nespresso we bring together the world’s most iconic coffee brands.

“The outstanding collaboration between the two teams resulted in a swift completion of this agreement, which will pave the way to capture further growth opportunities," he added.

Nestlé said that the partnership will significantly strengthen its coffee portfolio in the North American coffee market.

It will also help Starbucks expand in the grocery and foodservice market globally.

"This global coffee alliance with Nestlé is a significant strategic milestone for the growth of Starbucks," said Kevin Johnson, president and CEO of Starbucks.

"Bringing together the world’s leading coffee retailer, the world’s largest food and beverage company, and the world’s largest and fast-growing installed base of at-home and single-serve coffee machines helps us amplify the Starbucks brand around the world while delivering long-term value creation for our shareholders."

Under the alliance, Starbucks said that approximately 500 of its employees in the United States and Europe will join Nestle.