China’s coffee giant Luckin Coffee is reportedly eyeing a possible acquisition of Nestlé’s premium Blue Bottle Coffee as it looks to polish its brand image and move further up the coffee ladder.
Luckin Coffee looking to acquire Blue Bottle
Sources familiar with the matter say Luckin and its major backer, Centurium Capital, have been sounding out several potential takeover targets. Among them is the operator of % Arabica coffee stores in China, which is backed by private equity firm PAG. However, sources have declined to be named as the talks are private and still at an early stage.
Costa Coffee, owned by Coca-Cola, was also on Luckin’s radar, though insiders suggest the deal is unlikely to move forward.
At this point, discussions remain preliminary and may not result in any formal bid. Nestlé, PAG and Coca-Cola declined to comment, while Centurium, Luckin and % Arabica did not respond to requests for comment.
Rapid expansions, more to come
Founded in 2017, Luckin has grown at breakneck speed, rolling out thousands of outlets across China with a focus on affordable coffee and crowd-pleasing twists like coconut and cheese lattes. That rapid expansion has allowed it to overtake Starbucks in store count in China, even as the US coffee chain explores selling a majority stake in its local business to Boyu Capital.
Image credit: The Edge Malaysia
Once rocked by an accounting scandal that led to its Nasdaq delisting in 2020, Luckin has since staged a strong comeback. In the three months to September, the company posted revenue of US$2.1 billion, up 50 per cent year on year, and net income of around US$180 million.
Store growth remains aggressive. Luckin opened a net 3,008 new outlets during the quarter, including five in Singapore, 21 in Malaysia and three in the US, bringing its global store count to 29,214. The message is clear: Luckin isn’t just growing fast, it’s aiming higher too.
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