Retail Channels Our experts provide analysis on the retail industry, featuring insights from a local to global level on where and how consumers will shop across both traditional and emerging retail channels.

Nestlé Bets on Starbucks to Revive Coffee Sales

5/8/2018
Michael Schaefer Profile Picture
Michael Schaefer Bio
Share:

Michael Schaefer, Global Lead, Food & Beverage:

While the retail coffee business is a profitable one for Starbucks, it represents a small portion of its overall business—above all, Starbucks remains an operator of coffee shops. All of the company’s recent moves—from selling off the Tazo tea brand, to closing down online sales of Starbucks coffee through the Starbucks e-commerce site, among others—suggest a renewed commitment to its core business.

There is a strong argument for such focus—in key markets like China, consumers spend far more overall through coffee shops than on coffee at retail, a gap which is growing. Partnering with Nestlé instantly gives the company access to a vast global distribution and marketing network for its packaged coffee products, potentially offering stronger growth in more markets, whilst allowing Starbucks to focus on brand development and coffee shop experience.

For Nestlé, the deal represents a sea change in strategy—the company has long resisted allowing outside brands access to its Nespresso and Dolce Gusto pod platforms. While “Nespresso-compatible” products have existed in some markets for years, an official Starbucks partnership is something else altogether, with the Swiss company now devoting considerable resources to marketing an outside brand. With Starbucks coffee shops serving as a powerful brand driver in key emerging markets, this move allows access to an important and growing consumer base.

Interested in more insights? Subscribe to our content

Latest Insights

《2021天猫超市消费新趋势报告》发布

Euromonitor International 11 May 2022

Retail Innovation Conference & Expo

Euromonitor International 27 April 2022

Seamless Australia 2022

Euromonitor International 21 April 2022

Retail Asia Summit 2022

Euromonitor International 21 April 2022

Shop Our Reports

World Market for Retailing

During 2021, global retailing sales rebounded to surpass pre-pandemic levels buoyed by the expansion of e-commerce. While store-based sales saw recovery with…

View Report

New Concepts in Retail

Retailers are pushing the boundaries of innovation. Euromonitor International’s annual New Concepts in Retail report highlights how these efforts are reshaping…

View Report

Opportunities in Informal Retailing in Sub-Saharan Africa

Despite the growth of modern channels, informal retail channels continue to reflect the typical shopping habits of a large proportion of consumers across all…

View Report
Passport Our premier global market research database with detailed data and analysis on industries, companies, economies and consumers. Track existing and future opportunities to support critical decision-making across all functions within your organisation Learn More