Nestlé is reportedly exploring the sale of its premium coffee chain, Blue Bottle Coffee, as part of a broader strategic review initiated by new CEO Philipp Navratil.

According to Reuters, sources close to the matter have confirmed that the Swiss food giant is collaborating with Morgan Stanley to assess various options, including a potential divestiture of the brand, which has garnered a loyal following since its inception.

Nestlé acquired a majority stake in Blue Bottle Coffee in 2017 for approximately $700 million, aiming to capitalise on the burgeoning speciality coffee market.

However, recent reports suggest that any sale could be valued at a discount to that initial investment, as the company seeks to streamline its operations and exit the physical retail segment – a trend increasingly observed across the food and beverage industry.

Founded in 2002 by James Freeman in Oakland, California, Blue Bottle Coffee has grown into a premium coffee retailer with approximately 100 locations across the US and Asia.

The brand is known for its commitment to quality, sourcing beans from sustainable farms and highlighting freshness through small-batch roasting. In addition to its cafés, Blue Bottle has established a robust ecommerce platform, selling coffee grounds and branded merchandise.

Nestlé's decision to potentially divest Blue Bottle aligns with a broader industry trend, as major players reassess their portfolios in response to shifting consumer preferences and market conditions.

Notably, Coca-Cola is also considering the sale of its Costa Coffee chain, highlighting a growing focus on optimising brand assets within the competitive coffee landscape.

The review at Nestlé is not limited to Blue Bottle. Earlier this year, the company announced plans to evaluate its vitamin brands, including Nature's Bounty and Osteo Bi-Flex, and may also be looking to divest its water business, which encompasses iconic brands such as Perrier and S.Pellegrino.