Hip coffee brand Blue Bottle is selling a majority stake in the company to Nestlé.
With Nestlé reportedly paying up to $US500 million for a 68% stake in the company, Blue Bottle is certainly set to benefit when it comes to funding.
However, as a hip coffee chain known for its quality and attention to detail, Blue Bottle’s reputation could take a hit as a result of the deal.
“I would certainly say there is reason for Blue Bottle to worry about what this might do to their reputation,” Matthew Barry, beverage analyst at market research firm Euromonitor, told Business Insider. “This is a brand that has an independent, hipster ethos and it does not take much of a leap to predict that joining one of the world’s largest consumer goods companies might create some real issues there.”
But, Blue Bottle CEO Bryan Meehan says he isn’t worried.
“We don’t run our company on media headlines or social media headlines,” Meehan told Business Insider on Thursday.
He continued: “You can’t run your business by worrying what people will think. You have to run your business by believing in what you do. And, I know how things will be in the future — our customers don’t.”
Blue Bottle has a very different reputation than Nestlé’s other coffee brands — something people were quick to point out on social media on Thursday. Nescafé, for example, is famous for its instant coffee, a far cry from fresh-roasted coffees crafted by baristas.
Nestlé brings some baggage, as some customers have embraced Blue Bottle as a trendy, independent brand.
Meehan said that Blue Bottle was fully aware that an acquisition would likely be met with backlash. Customers fear change, especially when it comes to a brand that they love.
“The only thing we’re interested in changing is getting better,” Meehan said. As time goes on, he says, people will realise that Blue Bottle isn’t changing anything — except making coffee more delicious and “beautiful.”
Blue Bottle will operate as a stand-alone entity following the acquisition, with Meehan staying on as CEO. One major attraction to Nestlé, Meehan says, is that the company doesn’t treat Blue Bottle “like a child.” Instead, it trusts executives to continue running Blue Bottle, while also providing the coffee brand with funding, a global presence, and past experience with things like ready-to-drink beverages.
If Meehan can pull off independence after the acquisition, Barry says that should be enough for Blue Bottle’s reputation to stay strong.
“Much of the negative social media reaction has focused on fears that the acquisition will dilute the quality of the coffee in some way, which I think is an entirely unfounded fear,” Barry said. “Nestlé purchased this brand because they know it has a strong reputation for quality and the idea that they have plans to mess with that does not make much sense to me.”
Cannot wait for Nescafé by Blue Bottle by Nestlé to hit the shelves.
— Brock the Cradle (@brockwinstead) September 14, 2017
Can’t wait ’til they replace the Blue Bottles with Blue Bottle Nescafé.
— Buck Wilson (@buckwilson) September 14, 2017
Nestlé acquired a majority stake in Blue Bottle Coffee, no word yet on what this means for their dirt water brand otherwise known as Nescafe
— Marie Connor (@thistallawkgirl) September 14, 2017
Nestle: known for chocolate and exploiting water rights.
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