The Coca-Cola Company has bought British coffee chain Costa from Whitbread in a deal worth £3.9 billion.
Costa’s operations include nearly 4,000 retail outlets, its Costa Express vending operation, for-home coffee formats and a roastery.
Coca-Cola said the purchase adds a scalable coffee platform “with critical know-how and expertise” in a fast-growing, on-trend category.
Through the purchase of the UK’s largest coffee chain, Coke aims to expand beyond fizzy drinks as well as gain access Costa’s coffee platform across Europe, Asia Pacific, the Middle East and Africa.
The deal also complements Coca-Cola’s Georgia Coffee line in Japan, which is said to be the highest-grossing ready-to-drink coffee product in the world.
Coke said it is attracted to Costa’s “strong expertise” across the coffee supply chain, including sourcing, vending and distribution.
Whitbread – which bought Costa in 1995 for £19 million when it had 39 shops – split the chain from the rest of its business earlier this year as it came under pressure from investors.
Costa now operates more than 8,000 Costa Express machines in eight countries, which provide hot beverages in gas stations, cinemas and travel hubs.
Coca-Cola CEO James Quincey said: “Costa gives Coca-Cola new capabilities and expertise in coffee, and our system can create opportunities to grow the Costa brand worldwide.
“Hot beverages is one of the few segments of the total beverage landscape where Coca-Cola does not have a global brand. Costa gives us access to this market with a strong coffee platform.”
He added: “So, why Costa? Because Costa is a good fit – and the best way – for Coca-Cola to add a global coffee platform that will complement our existing system.
“Let me be very clear about why I use the word ‘platform’ and not ‘brand’. A platform means Costa isn’t just one thing. Not just a brand. Not just a retail operation. Not just vending. Not just a coffee roaster.
“A platform is all of those things and more. Costa is a platform with a great supply chain in coffee, a world-class roastery, a strong retail presence and a vending system. Costa has strengths in many countries and in many key distribution channels of the coffee business.”
Costa managing director Dominic Paul said: “Costa is a fantastic business with committed and passionate associates, a great track record and enormous global potential. Being part of the Coca-Cola system will enable us to grow the business farther and faster.
“I would like to say a huge thank you to our customers and to everyone in the Costa team who have helped us build the business to this position, and I look forward to the next exciting chapter in Costa’s vision of Inspiring the World to Love Great Coffee.”
© FoodBev Media Ltd 2019
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