Philips and Sara Lee to extend partnership to drive long-term growth in coffee market

Royal Philips Electronics today announced it has agreed to extend its partnership with Sara Lee Corp. to drive growth in the global coffee market. Under a new exclusive partnership framework, which will run through 2020, Philips will be the exclusive Senseo consumer appliance manufacturer and distributor for the duration of the agreement.

The extended partnership underlines the shared commitment from Philips and Sara Lee to further strengthen the Senseo brand through investment in innovation and market expansion. As part of the agreement, Philips will transfer its 50% ownership right in the Senseo trademark to Sara Lee. Under the terms of the agreement, Sara Lee will pay Philips a total consideration of EUR 170 million. The consideration for the agreement, which is expected to close in the first half of 2012, will be recorded as pre-tax earnings.

“With Senseo, Philips and Sara Lee pioneered the market for portioned coffee solutions, revolutionizing the consumption of high-quality coffee in the home,” said Pieter Nota, Chief Executive Officer of Philips Consumer Lifestyle. “Over 33 million Senseo appliances have been sold since its launch in 2001, and with today’s agreement we’re setting the stage for future success. Together with our Saeco espresso portfolio, we’re well placed to capture growth in the coffee appliance market.”

“This acquisition and partnership allows us to strengthen our relationship with Philips to focus on innovation in coffee technology and aggressively push geographical expansion,” said Jan Bennink, Executive Chairman of the board, Sara Lee Corp. “Philips’ long history of innovation, combined with superior retail strength in our key markets, makes it the perfect partner to work with as we take Senseo to the next level.”

 

The market for portioned coffee solutions continues to grow, with over 15 million appliances sold in 2011 – an increase of more than 20% on the previous year. Philips provides a full portfolio of coffee solutions that is tailored to the needs of the markets where it operates. This includes drip filter, portioned solutions and fully automatic espresso solutions. Through the Philips, Saeco and Gaggia brands, Philips is one of the world’s largest coffee appliance manufacturers. Sara Lee operates under several brands in the coffee category globally, including Douwe Egberts, Maison du Café, Café Pilão, Marcilla and Senseo. Sara Lee and Philips have been working together on Senseo since 2001, with Sara Lee’s Douwe Egberts brand producing the coffee pods and Philips designing and manufacturing the single-serve machines.

Senseo facts and figures

• Philips and Sara Lee first launched Senseo in the Netherlands in 2001. It has since launched in Belgium, France, Germany and Austria (2002); Denmark and Norway (2003); the UK (2004); Hungary (2006); Spain (2009) and Brazil (2010).
•Over 33 million Philips Senseo coffee machines have been sold.
•35 billion Sara Lee coffee pods have been sold, offering consumers across the world 35 enticing coffee varieties.
•A Senseo system can be found in more than half (60%) of households in the Netherlands, and over a quarter of homes in France (27%) and Germany (25%).

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