Nestle pays Starbucks $7.1bn to procure global coffee licensing rights

Nestle pays Starbucks $7.1bn to form global coffee alliance

Nestle has stumped up $7.1bn (£5.2bn) in order to convince high street coffee chain Starbucks to license the rights to its global brand.

The partnership will see Nestle win the right to market Starbucks' coffee beyond the confines of its own cafes, including enabling owners of Nespresso coffee machines to be able to purchase Starbucks coffee branded pods for the first time.

Nestle will stock Starbucks as part of a product range that already includes the Nescafe and Nespresso brands.

Under the terms of the deal Starbucks will continue to source its own coffee beans but Nestle will take on the process of roasting them for consumption, although no infrastructure will change hands and no Nestle products will appear in Starbucks outlets.

Nestle has been motivated to part with the sizeable chunk of cash in order to extend its reach beyond instant coffee to the fast-growing roast coffee sector.

Starbucks has launched a hi-tech roastery in Shanghai, embracing augmented reality to engage digitally savvy consumers.

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