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Burger King Inks Instant Coffee Deal with Nestlé

Burger King Worldwide announced a coffee deal for its Latin America/Caribbean (LAC) division, naming Nestlé Professional the preferred supplier for a new specialty-coffee menu coming to those markets.

BK sells Starbucks' Seattle's Best coffee in the U.S. but has opted to use Nestlé specialty coffee in Latin America.

The deal covers not only Nestlé’s soluble—i.e. instant—coffee but also the company’s coffee equipment. Burger King restaurants in LAC markets will use Nestlé Professional’s Nescafé Milano platform, described by the company as “new technology [with] the ability to create a wide range of coffee products from a simple espresso to a complicated moccachino or latte in seconds at the push of a button.” The Nestlé Professional division was created in 2008 but already operates in 90 countries.

The 1,255-unit LAC is one of Burger King’s strongest regions, reporting a 10.5% growth in same-store sales for the second quarter, ended June 30, 2012. The North America/Canada region’s comp-sales growth was 4.4% for that period. 3G Capital, which acquired Burger King in 2010, is backed by Brazilian investors.

“Specialty coffee is a huge area of growth for Burger King restaurants and a major focus for our brand in Latin America and the Caribbean,” Jose R. Costa, Burger King VP-marketing for Latin America/Caribbean, said in a release announcing the deal. The chain says Brazilians average 542 cups of coffee per person each year, and that 35% of that consumption comes from out-of-home (foodservice) providers.

Burger King says Nescafé Milano-prepared specialty coffees will be available throughout Latin America and the Caribbean by year-end, but it has given no indication when it might launch specialty coffees to U.S./Canada stores. Rival McDonald’s launched its McCafé brand here in late 2008 and now offers a broad array of hot and cold specialty coffees in addition to its Premium Roast brewed coffee. McDonald’s recently filed a trademark registration covering whole-bean and ground coffee, which it does not currently sell but is believed to be interested in.

Burger King launched its own coffee brand, BK Joe, in 2005 but scrapped it in 2010 when it opted to serve Starbucks-owned Seattle’s Best coffee. Starbucks recently entered the brewing-equipment market with its introduction of Verismo home brewing machines.

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