The cycle from homegrown, artisanal coffee bar on an alley to selling out to an international food conglomerate is complete, as it's announced today that Swiss food giant Nestle has purchased a 68-percent majority stake in Bay Area-based Blue Bottle Coffee. The move, which follows many similar buyouts and acquisitions of well loved local beer, wine, and coffee brands over the last decade or so, may be a good one for Blue Bottle's current growth strategy and the retirement plans of its soft-spoken founder, James Freeman. But for fans of the 15-year-old roaster and coffee bar chain at least the ones who disdain the ongoing corporatization of our world in favor of the small-scale, scrappy sort of coffee places of the sort Blue Bottle was not that long ago this could just be a final nail in the coffin of a brand that was already spreading itself more thin than they liked.
The New York Times doesn't have the financial details of the deal, but they say it marks "one of the surest signs yet of how so-called third-wave specialty coffee the kind that inspires almost monastic devotion to pour-over brews and perfectly steeped drinks has become a hot business."
Business Insider says Nestle is paying $500 million for Blue Bottle based on a $700 million valuation. The remaining 32 percent of the company is owned by Freeman, and some managers and employees.
"Their commitment to us was, ‘We love what you do, we want to help you grow,’” Freeman tells the Times. "One of the biggest food companies in the world has really voted in favor of very delicious coffee."
"My goal as CEO has been to secure a sustainable future for Blue Bottle Coffee that would enable it to flourish for many years to come," Blue Bottle Coffee CEO Bryan Meehan says in a statement. "I'm excited to work with Nestlé to take a long-term approach to becoming a global leader in specialty coffee."
Blue Bottle expanded well beyond the Bay Area in the last five years, with ten locations each in New York and LA, a half dozen in Tokyo, one in Washington D.C., and more already about to open in Boston and Miami causing many an SF coffee snob to write them off for losing their small-scale cred.
It seems like just yesterday we were hearing that beloved SF bakery and restaurant Tartine was headed into a partnership with Blue Bottle, only to walk away from the bargaining table six months later in favor of staying independent a move that was largely seen as Tartine deciding that Blue Bottle wanted to grow at a rate that couldn't be sustained Tartine's by-hand bread- and pastry-making ethos.
The majority stake means that Blue Bottle is now part of a portfolio that includes the Nescafe and Nespresso brands, as well as Stouffer's, Gerber baby food, and Friskies cat food.
And this announcement will give neighbors in San Francisco's Lower Haight neighborhood reason for relief and I-told-you-so's from those who fought it after they successfully blocked Blue Bottle from taking over a space occupied by a beloved neighborhood cafe for two decades, thanks to an established ban on chain retail.
So, you can rest assured that Blue Bottle probably won't be opening any more locations in SF anytime soon, unless they're in a mall food court.