Coca-Cola’s Costa Acquisition Seen as ‘Wise Step’

Costa will give Coke a global coffee platform with nearly 4,000 retail outlets in more than 30 countries.

September 04, 2018

ATLANTA – The Coca-Cola Co. has announced plans to acquire Costa Ltd., the global coffee brand based in Britain, for $5.1 billion, a move that gives Coke a strong coffee platform in more than 30 countries with potential for future expansion, according to Coca-Cola.

A leading brand, Costa has nearly 4,000 retail outlets, for-home coffee formats, a state-of-the-art roastery and a coffee-vending operation called Costa Express that serves barista-quality coffee in a variety of on-the-go locations, including gas stations, movie theaters and travel hubs.

The acquisition, which is expected to close in the first half of 2019, gives Coca-Cola a scalable coffee platform in an on-trend category. Costa is the leading coffee company in the United Kingdom and has a growing footprint in China and other markets.

“This is a wise step for Coca-Cola, moving further away from sugary carbonates and toward a globally fast-growing market segment like coffee,” said Christian Warning, owner of The Retail Marketeers, a Hamburg, Germany-based sales and marketing agency and NACS regional representative EMEA.

“I look forward to seeing how the big whales will compete against the innovative tech- and customer-driven coffee shop chains that are growing locally and regionally in cities around the world,” Warning added. “They reinvent themselves so quickly to meet the changing needs of foodvenience-seeking consumers. Will Costa/Coke be able to react to hyperlocal market demand? What I know for sure is that they will boost the number of Costa Express self-serve machines by putting them next to their Coca-Cola machines and move them into new verticals and markets.”

Meanwhile, Japanese consumers are enjoying a clear soda that Coca-Cola recently rolled out to a market that believes clear drinks may be healthier than traditional formats, reports Fooddive.

About 100 new drinks appear in Japanese markets each year, and one of the newest is Coca-Cola Clear, a zero-calorie sparkling beverage with a splash of lemon, sweeteners and caffeine. This comes as companies are producing clear drinks that taste like beer, coffee, tea and even a clear, yogurt-flavored beverage.

If the see-through drink trend makes it to the U.S., it won’t be a first. PepsiCo introduced Crystal Pepsi in the ‘90s and brought it back in 2016.