What is Starbucks margin on their food

Nestlé's Starbucks products go on sale

Starbucks coffee capsules for Nespresso machines: The Swiss food company wants to use them to accelerate its growth.

In the next few days, Starbucks products will go on sale in Asia, Europe, Latin America, the Middle East and the USA under the auspices of Nestlé. This includes 24 different products from the American brand.

The world's largest food company needs a caffeine boost that will boost its slowed growth and increase profit margins. Today Nestlé is presenting its new Starbucks product line in Vevey, tomorrow CEO Mark Schneider will take stock of the 2018 consolidated results.

Third largest acquisition

In May of last year, Nestlé announced the takeover of Starbucks' coffee business for retail and online platforms. The deal was closed in August. Nestlé paid 7.2 billion dollars for an area that generates annual sales of around 2 billion dollars.

According to Bloomberg, this is the largest acquisition under the Mark Schneider era and the third largest transaction in the history of the Swiss food company. The coffee houses will remain with the US group, and Nestlé has not taken over ready-to-use drinks either.

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The coffee giant

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In Switzerland, sales should start later this year. Nestlé does not disclose the retailer where the new products will be sold. When asked, Migros and Coop do not want to reveal whether they want to and will sell Starbucks products from Nestlé in their stores in the future.

Migros has been offering Starbucks mixed milk beverages since 2012, such as the Caffè Latte, which it sources from the Swedish-Danish dairy cooperative Arla. Nothing will change about that.

Nestlé is only number five in the US

With the launch of Starbucks products, Nestlé is strengthening its role as the world market leader in the coffee market, where the group has an estimated 20 percent share of sales thanks to Nespresso and Dolce Gusto capsules and the soluble Nescafé. In recent years, however, the competition in the coffee sector has grown stronger, especially in the USA. Starbucks is the market leader in the US business, and Nestlé has only been fifth according to Euromonitor.

With the takeover of Starbucks in the retail business, Nestlé is now hoping for a surge in growth. In addition, the products are positioned in the higher-priced segment and therefore promise higher margins.

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