Nestlé to Acquire Seattle’s Best Coffee Brand From Starbucks

News of the acquisition came as Nestlé lifted its full-year sales guidance after higher selling prices boosted its performance in the first nine months of 2022.

Coffee has been one of Nestlé’s best-performing categories in recent years. The company’s coffee products benefited from consumers drinking more brews at home during the pandemic and demand has remained high, partly helped by people continuing to work from home.

Even before the Covid-19 pandemic, Nestlé had identified coffee as a priority in its overhaul of its portfolio to focus on categories it believed had the strongest growth potential. In one of its biggest moves, Nestlé in 2018 agreed to pay Starbucks more than $7 billion for the rights to sell the Seattle chain’s packaged coffee in grocery and other retail stores. The Swiss company has also invested in smaller brands such as Blue Bottle Coffee and Chameleon Cold-Brew.

For Starbucks, the sale of Seattle’s Best comes as the company looks to focus more on its stores. Last month, Interim Chief Executive

Howard Schultz

outlined a wide-ranging revamp of the coffee chain, ranging from cafe upgrades to expanded employee benefits.

Nestlé also reported on Wednesday a surge in sales for the first nine months of the year, driven by higher selling prices for its products, which also include KitKat chocolate and Perrier water.

The company said organic sales growth was 8.5% in the period, consisting of price increases of 7.5% and a 1% rise in volumes. Price increases were particularly steep in North America, up 11.1%.

Overall sales for the first nine months of the year rose 9.2% to 69.13 billion Swiss francs, equivalent to about $69.53 billion.

Companies across the consumer products industry are grappling with how much to increase prices by to offset higher costs for ingredients, transport and labor, while avoiding alienating consumers also struggling with high levels of inflation.

Nestlé’s sales figures suggest shoppers are mostly willing to pay up for its brands. The company said its performance was such that it now expects full-year sales growth to be about 8%, an increase on its previously forecast range of between 7% and 8%. It said it expects its underlying trading operating profit margin at around 17%.

So far this year, Nestlé said, its Purina PetCare range was the largest contributor to organic growth. The company also called out coffee as a top performing category, with sales growing at a high single-digit rate boosted by Nescafe, Starbucks and Nespresso products.

—Giulia Petroni contributed to this article.

Write to Peter Stiff at peter.stiff@wsj.com

News of the acquisition came as Nestlé lifted its full-year sales guidance after higher selling prices boosted its performance in the first nine months of 2022.

Coffee has been one of Nestlé’s best-performing categories in recent years. The company’s coffee products benefited from consumers drinking more brews at home during the pandemic and demand has remained high, partly helped by people continuing to work from home.

Even before the Covid-19 pandemic, Nestlé had identified coffee as a priority in its overhaul of its portfolio to focus on categories it believed had the strongest growth potential. In one of its biggest moves, Nestlé in 2018 agreed to pay Starbucks more than $7 billion for the rights to sell the Seattle chain’s packaged coffee in grocery and other retail stores. The Swiss company has also invested in smaller brands such as Blue Bottle Coffee and Chameleon Cold-Brew.

For Starbucks, the sale of Seattle’s Best comes as the company looks to focus more on its stores. Last month, Interim Chief Executive

Howard Schultz

outlined a wide-ranging revamp of the coffee chain, ranging from cafe upgrades to expanded employee benefits.

Nestlé also reported on Wednesday a surge in sales for the first nine months of the year, driven by higher selling prices for its products, which also include KitKat chocolate and Perrier water.

The company said organic sales growth was 8.5% in the period, consisting of price increases of 7.5% and a 1% rise in volumes. Price increases were particularly steep in North America, up 11.1%.

Overall sales for the first nine months of the year rose 9.2% to 69.13 billion Swiss francs, equivalent to about $69.53 billion.

Companies across the consumer products industry are grappling with how much to increase prices by to offset higher costs for ingredients, transport and labor, while avoiding alienating consumers also struggling with high levels of inflation.

Nestlé’s sales figures suggest shoppers are mostly willing to pay up for its brands. The company said its performance was such that it now expects full-year sales growth to be about 8%, an increase on its previously forecast range of between 7% and 8%. It said it expects its underlying trading operating profit margin at around 17%.

So far this year, Nestlé said, its Purina PetCare range was the largest contributor to organic growth. The company also called out coffee as a top performing category, with sales growing at a high single-digit rate boosted by Nescafe, Starbucks and Nespresso products.

—Giulia Petroni contributed to this article.

Write to Peter Stiff at peter.stiff@wsj.com