Nestlé sells Chameleon coffee to food and beverage operator

Dive Brief:

• Nestlé sold its Chameleon Organic Coffee brand to Systm Foods, a food and beverage brand platform, for an undisclosed amount. 
• The producer of organic, sustainably grown and ethically sourced coffee joins plant-powered functional beverage brand Rebbl in Systm’s portfolio.
• The sale of Chameleon comes five years after Nestlé purchased the brand, and continues an ongoing process for the CPG of overhauling its portfolio to generate more growth in trendier categories.

Dive Insight:

While the sale of Chameleon pales in comparison to some of the multibillion-dollar divestitures by Nestlé in recent years, it’s the latest evidence that the company is far from over in repositioning itself for the future.

Since 2017, Switzerland-based Nestlé has closed or announced more than 75 transactions as it jettisons slower growing, less profitable brands like its confections and ice cream businesses in the U.S. and the majority of its struggling North American bottled waters operation. At the same time, it has bulked up on businesses that are more attuned to changing consumer tastes, including coffee, pet food, nutrition, health and wellness. 

Nestlé, which for years defined its presence in coffee with Nescafé, Taster’s Choice and Nespresso, bulked up its presence in the premium side by acquiring a stake in popular coffee shop chain Blue Bottle and snapping up Chameleon in 2017. The following year it paid $7.15 billion to Starbucks to sell the chain’s coffee beans and drinks in grocery stores and other outlets around the world.

In a statement, Nestlé confirmed the sale of Chameleon but did not provide details as to why it decided to divest the brand. “With this sale Nestlé will continue to focus on its portfolio of leading coffee brands,” the company said.

It’s possible Nestlé, with a global reach, was too constrained by Chameleon’s ethos of organic, sustainably grown and ethically sourced coffee — making it harder to grow the brand on a large-enough scale even if it agreed with the underlying values. The company also could have decided to prioritize its attention on its other premium and well-known coffee brands.

It’s the latest brand with a socially friendly halo to be offloaded by a large CPG. Just last month, Coca-Cola announced plans to phase out Honest tea — an organic, low-sugar and Fair Trade Certified brand — that had seen sales drop. Instead, the beverage giant said Gold Peak, a national brand, and the regional Peace Tea will now anchor its ready-to-drink tea strategy in North America.

Systm Foods, Chameleon’s new owner, said it prioritizes brands that make high-quality, plant-based, and innovative daily-use products. Chameleon supports its shared product goal of championing better-for-you ingredients, environmental sustainability and social responsibility — a trio of attributes that are highly sought after by today’s consumer. The Systm platform is a partnership between Systm Brands and PowerPlant Partners, a venture capital investor in companies that are better for humanity and the climate. 

Founded in 2010, Texas-based Chameleon has become a leading organic cold brew brand in the U.S. and one of the top refrigerated cold brew offers in the country, the company said in a statement. Its current portfolio consists of multi-serve concentrates and single-serve RTD products. 

Mark Rampolla, a founding partner of PowerPlant Partners, said Chameleon “has experienced significant growth over the past few years and its social goals align perfectly with our beliefs as investors.”

Cold brew coffee has been among the fastest-growing beverage categories, and the acquisition of Chameleon will give its owners a major presence in the space. In 2017, U.S. sales were around $166 million, according to data from Statista. By 2025, this figure is forecast to soar to more than $940 million.