Although Nestlé hasn't disclosed any financial details, according to a source familiar with the deal, the purchase cost Nestle $425 million, Reuters reported.
Blue Bottle coffee is a symbol of San Francisco's love for coffee, even though there are now Blue Bottle cafés in Los Angeles, New York and Tokyo.
James Freeman, the founder of Blue Bottle Coffee, said during a phone interview on Wednesday with The New York Times that, "Their [Nestle's] commitment to us was, ‘We love what you do, we want to help you grow."
"One of the biggest food companies in the world has really voted in favor of very delicious coffee," Freeman added.
Freeman also explained how the deal represents security for his company.
"We don't have to do an IPO [Initial Public Offering]. We don't have to fundraise again. We don't have to talk to bankers," he said.
Index Ventures partner Mike Volpi wrote in a statement, "Blue Bottle Coffee is the biggest brand in specialty coffee in America and Japan today."
The statement goes on to read, "Their success is a testament to James and Bryan' [the CEO's] genius and ability to create a unique sense of value that's translated into a large, loyal following. It's the power of the Blue Bottle brand that attracted us to invest early on, and it's been incredibly gratifying to watch them build an enduring company."
Nestle's purchase comes after a class-action lawsuit filed in a Connecticut federal Court last month that accused Nestle's Poland Spring Water of "colossal fraud" by deceiving American consumers into thinking they are drinking "100 percent natural spring water" instead of "common groundwater."
