By Eric Pfanner and Thomas Mulier.
Blue Bottle Coffee’s founder describes himself as “a slightly disaffected freelance musician and coffee lunatic, weary of the commercial coffee enterprise.” And yet he’s just sold a majority stake to the ultimate commercial coffee enterprise — Nestle SA, owner of Nespresso and Nescafe.
Such pairings are becoming increasingly common as consumer-product giants like Nestle, Unilever, L’Oreal SA and Diageo Plc seek growth beyond the stagnating megabrands that underpinned their strategies for decades. Now tiny labels with organic, hipster or ethical credentials are all the rage, and the global behemoths are paying ever more for them.
A recent flurry of deals for niche makers of everything from vegetarian burritos to vegan mayonnaise to celebrity-backed tequila underline the trend. As acquisitions accelerate, buyers have to look harder for targets and pay more for them. Then they have to try to maintain the indie cred that attracted consumers to the new brands in the first place.
Read more at Bloomberg.