Centurium Capital has reached an agreement with Nestlé to acquire the global retail store operations of Blue Bottle Coffee for a price below $400 million. Following the transaction, Nestlé will retain Blue Bottle's fast-moving consumer goods business, including coffee beans, instant coffee, and ready-to-drink beverages.
It is noteworthy that Blue Bottle Coffee is currently operating at a loss. According to exclusive information, for the 12-month period ending June 30, 2025, Blue Bottle Coffee generated approximately $250 million in revenue. The United States contributed about $150 million, while the Asia-Pacific region contributed around $100 million. Sources also indicated that Blue Bottle Coffee is projected to achieve profitability by 2026. Centurium Capital did not respond to requests for comment on the matter.
Separately, an industry source revealed that Luckin Coffee Inc. is actively seeking candidates with strong branding expertise in the market, in preparation for the subsequent integration of Blue Bottle Coffee. The source stated, "To sell coffee priced over 40 yuan, branding is undoubtedly the top priority."
Blue Bottle Coffee was founded in 2002 in California, USA, opening its first store in San Francisco in 2005. The brand positions itself in the premium specialty coffee segment, with fresh roasting being one of its key characteristics. Founder James Freeman previously emphasized that Blue Bottle Coffee outlets only serve coffee roasted within the last 48 hours. The company currently maintains its own global sourcing channels and roasting standards.
In 2017, Nestlé acquired a 68% stake in Blue Bottle Coffee for less than $500 million. This move was part of Nestlé's strategy to explore high-average-order-value categories and seek new growth opportunities.
By the end of 2025, Blue Bottle Coffee operated 140 stores globally, with 31 located in Asia. Compared to Japan and South Korea, Blue Bottle entered the Chinese market relatively late. Five years after being acquired by Nestlé, Blue Bottle Coffee made its debut in China in 2022, with its first store situated by Shanghai's Suzhou Creek. By the end of 2025, the company had 15 stores in mainland China, located in Shanghai, Shenzhen, and Hangzhou, with the Hangzhou store opening as recently as November 14. Blue Bottle Coffee's global CEO, Karl Strovink, has publicly stated that the company views China as an important and continuously growing market.
The past three years have also been a period of rapid expansion for Chinese chain coffee brands. Even Peet's Coffee, which similarly targets the specialty coffee segment, embarked on large-scale expansion during this time, with 2022 to 2024 marking its peak expansion phase, adding nearly 200 stores over three years. In contrast, Blue Bottle Coffee's expansion pace has been relatively slow.
The acquisition of Blue Bottle Coffee holds both financial value and strategic significance for Centurium Capital. As of now, Centurium Capital holds a 23.28% total equity stake and 53.6% voting rights in Luckin Coffee Inc., making it the absolute controlling shareholder. Centurium Capital founder Li Hui assumed the role of Chairman of Luckin Coffee Inc. in April 2025, deeply involving himself in the company's strategic planning and daily operations. At a ceremony in late 2025 celebrating "over 1,000 stores in Chengdu," both Li Hui and Luckin Coffee CEO Guo Jinyi attended in person, with one Luckin employee remarking on their diligence and frontline engagement.
Luckin Coffee Inc., having recently surpassed the 30,000-store milestone, is facing profit declines due to intense competition in the delivery sector. In the fourth quarter of 2025, Luckin's revenue grew 32.9% year-over-year to 12.777 billion yuan, but net profit fell by 38%. The operating profit margin decreased from 10.5% to 6.4%, and same-store sales growth was a modest 1.2%.
The mid-price segment has become the most fiercely competitive arena for Chinese coffee brands, and even Luckin, with its scale advantage of 30,000 stores, is no exception. Centurium Capital's acquisition of Blue Bottle Coffee is intended to accelerate Luckin's premiumization strategy. An informed source mentioned that Luckin had previously also considered M Stand.
Furthermore, this move can expedite Luckin's overseas expansion. By the end of 2025, Luckin had 160 overseas stores, predominantly concentrated in Southeast Asia, with only 9 stores in the US market. The US is widely regarded as the final frontier and most challenging market for international expansion. As a specialty coffee brand originating in the US, Blue Bottle can provide valuable support to Luckin in terms of overseas channels, local teams, and access to premium customer segments.
For Centurium Capital, seeking suitable coffee investment targets globally falls within its area of expertise. It is understood that Centurium Capital had previously expressed interest in Starbucks and Costa. A source close to Centurium indicated that their interest in Starbucks was contingent on "obtaining a controlling stake." However, given Centurium's status as the controlling shareholder of Luckin Coffee, and Starbucks headquarters' desire to retain some equity and influence over its China operations, the likelihood of such a transaction was slim from the outset.
Centurium pursued discussions further regarding Costa. The rationale was that Costa could provide a clear price-point differentiation from Luckin in the domestic market—with Luckin targeting the mass market and Costa the premium segment—while also aiding Luckin's internationalization efforts. However, this transaction also did not proceed.
A source familiar with Costa stated that the deal was initially viewed favorably at the negotiating table, primarily because "the brand is good" and it has "a strong base in the UK, generating over $200 million in annual profit." The drawbacks included numerous older stores in Europe requiring renovation, coupled with outdated IT systems, making upgrades difficult and costly.
Costa's potential in the Chinese market is also viewed with caution. Another industry insider commented, "After Boyu Capital invested in Starbucks, even high-end malls like SKP are opening Starbucks locations. In Beijing, for example, several Costa stores are at a greater disadvantage." Although a full sale of Costa has been challenging, its China business is reportedly still being considered for a separate divestiture.
Other investment targets seriously evaluated by Centurium Capital included %Arabica, M Stand, and Blue Bottle Coffee.
The sale of Blue Bottle by Nestlé is understood to be driven by a strategic shift towards "asset-light" operations, aiming to divest relatively asset-heavy retail businesses promptly. This direction has been a focus since bringing in a hedge fund and changing its CEO. Besides Blue Bottle Coffee, Nestlé is also considering selling its bottled water business.
To facilitate this strategic shift, Nestlé was willing to sell Blue Bottle at a discount. A source close to the transaction noted that "Centurium Capital's acquisition price is lower than what Nestlé originally paid."
An industry source close to Blue Bottle mentioned that after becoming a Nestlé subsidiary, Blue Bottle maintained relative operational independence, which helped preserve its brand value and philosophy. However, in Asian markets like China and South Korea, Nestlé-appointed executives were involved in strategic formulation, though not as final decision-makers, with day-to-day operations primarily handled by Blue Bottle's team. Nonetheless, its overall development in China has been slow.
It is understood that since the latter half of last year, Blue Bottle Coffee engaged in intensive discussions with major shopping malls in China regarding store locations. Many of these spaces were previously occupied by Starbucks Reserve stores, which became available as Starbucks opted not to renew leases as part of its cost-cutting and efficiency measures.
As a brand with a similar price point and positioning, Centurium Capital also had contact with %Arabica, but the transaction did not advance. An investment industry source explained that, on one hand, Blue Bottle Coffee's brand authenticity is perceived as stronger, enjoying greater cultural recognition, and its store designs are considered more premium and refined. On the other hand, Blue Bottle's financial performance was relatively better compared to %Arabica. Additionally, %Arabica's equity structure is more fragmented, which would complicate a merger or acquisition.
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