UPDATE 1-Nestle buys majority stake in Blue Bottle Coffee

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LONDON/LOS ANGELES, Sept 14 (Reuters) - Nestle has bought a majority stake in Blue Bottle Coffee, stepping into the world of high-end speciality coffee bars.

The Swiss maker of Nescafe instant coffee and Nespresso pods announced the purchase on Thursday without disclosing financial terms.

The move comes amid consolidation in the so-called third-wave coffee sector in the United States. This market caters to discerning customers who have grown up on Starbucks but have progressed to more exotic coffee drinks coaxed from traditional espresso machines or made by expert baristas.

Nestle, the world’s biggest coffee company, said that Blue Bottle would continue to operate as a standalone entity and that current management and employees would retain a minority stake.

California-based Blue Bottle has raised nearly $121 million in funding from high-profile investors including Twitter co-founder Ev Williams, Fidelity and GV (Google Ventures), according to data compiled by Crunchbase.

The company operates minimalist-style coffee bars in major U.S. cities and Japan. It expects to have 55 locations by the end of 2017, up from 29 at the end of last year. It also sells high-end bottled coffee drinks and roast and ground coffee.

Editing by David Goodman