Skip to main content

Panera Bread CEO on Why Starbucks' Deal With Nestle Won't Be Last Coffee Deal

Starbucks and Nestle joined forces Monday to ink a clever coffee deal. Panera Bread's CEO explains why more deals are likely coming in the coffee space.

Coffee is so hot, Starbucks' (SBUX) - Get Starbucks Corporation Report clever new deal with Nestle revealed Monday will unlikely be the last big transaction. 

"Clearly the consumer likes to drink coffee and as it has become more habitual, we will continue to see growth in the coffee space," Panera Bread CEO Blaine Hurst tells TheStreet. "I would not at all be surprised if there are more deals in the coffee space because consolidation, particularly on the buying and roasting side, makes a whole lot of sense - the economics get a lot better as you consolidate that pie."

Panera is owned by the world's second largest player in the coffee space in JAB Holdings, an entity that has been a very aggressive acquirer in the coffee space. In 2012, it spent $974 million to scoop up Peet's Coffee & Tea and $340 million for Caribou Coffee. It's largest coffee deal was $9.8 billion to purchase D.E. Master Blenders in 2013.

Scroll to Continue

TheStreet Recommends

Hurst says Panera will focus more on improving the coffee experience in its restaurants over the next 12 to 18 months. He also teased a potential bottled coffee launch in supermarkets.