Coca-Cola to acquire Costa Coffee

Coca-Cola is buying the British-owned Costa Coffee chain from Whitbread, the UK’s leading hotel, restaurant and coffee shop operator, for a sum of GBP3.9 billion (approx. €4.4 billion). The acquisition will be a significant extension to the American soft drinks manufacturer’s current range of products and markets. It will also give Coca-Cola valuable expertise in the coffee supply chain, including sourcing, vending and distribution.

Costa Coffee was founded in 1971 by two brothers, Bruno and Sergio Costa. In 1995 Whitbread paid GBP19 million to purchase the business, which comprised just 39 branches at the time. Following rapid expansion in recent years, Costa Coffee currently has over 2,400 shops in the UK alone and is active in 31 countries in total.

Besides its own outlets, Costa coffee is now sold through Costa Express in more than 8,000 vending machines – with the network having doubled since 2014 thanks to the ‘Project Grid’ initiative. Costa Express has been disrupting its coffee industry peers with its intelligent supply chain for several years, based on automated forecasting and replenishment for its network of ‘smart’ self-service machines, and its strategy of tight inventory, warehousing and logistics management to reduce costs, improve customer satisfaction and cut carbon emissions.

Welcome addition

James Quincey, CEO of Coca-Cola, regards the takeover of Costa Coffee as a welcome addition to his company’s existing offering: “Hot beverages is one of the few drinks segments where Coca-Cola does not have a global brand. Costa gives us access to this market with a strong coffee platform”, he said. The transaction is expected to close in the first half of 2019. Incidentally, Coca-Cola recently also acquired a minority stake in BodyArmor, a fast-growing line of premium sports performance and hydration beverages.