Nestlé ramps up restructuring with Blue Bottle Coffee sale and job cuts
Key takeaways
- Nestlé accelerates its restructuring by selling Blue Bottle Coffee and reportedly planning UK layoffs.
- The company shifts away from retail-heavy businesses toward scalable global brands.
- Nestlé is doubling down on core categories, backed by its steady Q1 2026 performance.
Nestlé has agreed to sell Blue Bottle Coffee as part of its ongoing restructuring, marking a retreat from specialty retail coffee. The move aligns with the company’s strategy to streamline its portfolio and focus on scalable global brands, particularly in coffee, where Nescafé and Nespresso continue to drive growth.
The divestment comes as Nestlé accelerates efforts to exit or review non-core assets, including its water division and parts of its vitamins and supplements businesses. The F&B giant is increasingly sidelining lower-growth businesses, as management prioritizes brand-led categories with stronger international reach.
At the same time, Nestlé is implementing significant cost-cutting measures, including plans to reduce its workforce by around 16,000 roles. The cuts form part of a broader program aimed at delivering billions in savings through simplification, centralization, and the increased use of automation.
Nestlé’s reported plans to cut more than 450 UK jobs have drawn strong criticism from the GMB Union this week, which warned the move will “rip the heart out of communities.” The majority of cuts are expected at key sites in York and Gatwick. York is one of the company’s largest manufacturing hubs, producing iconic confectionery brands like KitKat. Gatwick is primarily a corporate and administrative center.
The portfolio changes and job reductions underscore the scale of Nestlé’s new strategy. The company is reshaping its operations to improve efficiency and concentrate investment on core growth areas, as it responds to cost pressures and shifting market dynamics.
Why Nestlé sold Blue Bottle
Nestlé will sell Blue Bottle to China-based private equity firm Centurium Capital, the largest shareholder in Luckin Coffee, for an undisclosed fee. The deal, which is expected to close in 2026, includes Blue Bottle’s cafés and most of its consumer business, while Nestlé retains rights to certain branded products like Nespresso pods.
Nestlé offloads Blue Bottle Coffee, as it shifts toward scalable, asset-light coffee businesses.
The sale reflects Nestlé’s shift away from operationally complex, retail-heavy models toward more scalable, asset-light businesses. Blue Bottle, a premium “third-wave” coffee chain, evidently did not align with the group’s focus on global platforms.
At the same time, coffee remains a standout category for Nestlé. In Q1 2026, it was the company’s top growth driver, delivering around 9.3% organic growth, with strong contributions from Nescafé and Nespresso.
Nestlé and Starbucks this month revealed plans to target the fast-growing cold coffee segment with the launch of the “Starbucks Coffee Craft” concentrate, designed to bring customizable, café-style drinks into the home. The product is made with high-quality Arabica beans.
Meanwhile, consolidation in the coffee industry has heated up. Keurig Dr Pepper’s recent US$18 billion JDE Peet’s acquisition is set to create a scaled global coffee powerhouse, combining major brands like Jacobs, L’OR and Peet’s with its single-serve platform.
The company plans to split the combined business into two standalone entities — one focused on North American beverages and the other on global coffee — to sharpen strategic focus and compete more directly with industry leaders like Nestlé.
Nestlé targets leaner portfolio
Nestlé CEO Philipp Navratil is pushing an ambitious reset built around one idea: make the company “simpler, faster, and more focused.”
His plan centers on four core engines — coffee, pet care, nutrition, and food and snacks — while cutting complexity and tying performance more tightly to results. The goal is to restore consistent growth and margins after a period of operational setbacks and sluggish volume performance.
Around 16,000 planned job cuts underline the scale of Nestlé’s restructuring push toward efficiency.
A key part of that ambition is shrinking the portfolio. Nestlé is actively exiting or reviewing businesses that don’t fit the new model, such as ice cream. Ice cream — despite its scale — is seen as a distraction, with the company moving to sell remaining assets to focus capital on higher-growth, higher-margin categories.
This push reflects a broader strategy shift: fewer categories, but deeper investment in global “power brands” and scalable platforms. Nestlé believes concentrating resources this way will enable faster decision-making, stronger execution, and more consistent organic growth, rather than relying on price increases or sprawling operations.
Nestlé delivered steady results in Q1 2026, with an organic growth of around 3.5%. The CPG’s reported sales were approximately CHF 21.3 billion (US$27.1 billion), a decrease of 5.7% year-on-year. Growth was driven by improving volumes across key categories, with Coffee and Snacks providing the strongest momentum.
Unilever’s decision to sell its Foods division to McCormick & Company underscores a broader industry shift also seen at Nestlé. While Nestlé is pruning niche assets like Blue Bottle to target higher-margin categories, Unilever has gone further by offloading much of its food exposure altogether. Unilever instead wants to focus on what it regards as faster-growing areas, like beauty, well-being, and home care.
