Nestle has acquired a majority stake in premium coffee company Blue Bottle Coffee.
Nestle, a Swiss company, already owns coffee brands Nespresso and Nescafe, but it has had a limited impact on the U.S. coffee market.
Nestle CEO Mark Schneider took over this year. He has expressed interest in growing the company's coffee business and expanding its North American footprint. The Blue Bottle acquisition will do both.
"This is a really interesting move on the part of Nestle," Matthew Barry, a beverage analyst at Euromonitor International, said in an email.
"While in the past rivals like JAB Holdings and Lavazza have been aggressive in adding new brands, Nestle has preferred to keep the focus on its current coffee brands like Nespresso," Barry wrote. "It's not surprising that they would make an exception here though, because this premium coffee space has a lot of potential."
Blue Bottle CEO Bryan Meehan said he met Schneider in February at one of Blue Bottle's Brooklyn coffee shops. Schneider respects what Blue Bottle does as a company, Meehan said.
Nestle is an expert in coffee for in-home consumption, Meehan said. Blue Bottle is driving innovation in the specialty coffee market and is primarily focused on retail, two areas where Nestle has a growing interest, he said.
"And we were interested in working with someone who would let us get on with what we're good at doing," Meehan said.
That sold him.
Nestle now owns 68 percent of Blue Bottle, Meehan said. The company will replace the only two current nonemployee board members. Blue Bottle will still hold two board seats. More seats may be added, Meehan said.
Blue Bottle opened its first coffee shop in Oakland, California, 15 years ago. Many of its shops are in the Bay Area, but it has expanded to cities such as New York and Tokyo. It is expected to have 55 stores open by the end of the year, up from 29 at the end of last year, according to Nestle's press release.