Coca-Cola buys coffee chain Costa

Coca-Cola and PepsiCo seem to be engaged in a race to make themselves less and less dependant on sugary drinks. Just days after Pepsi spent a record amount on Sodastream, Coca-Cola paid 4.4 billion euro for the world’s second largest coffee chain Costa.

Hot beverages are key

Coca-Cola buys Costa Coffee from British hotel group Whitbread, who acquired the then 39 coffee bars of Costa back in 1995. Nowadays the number of Costa coffee bars has gone times 100 to 4000 in Europe and the Middle and Far East, trailing only Starbucks in the global coffee hierarchy. 

This acquisition is another milestone in Coca-Cola’s efforts to lower the importance of sugary carbonated drinks and increase healthy options. Hot beverages are a big business, the American company says, but it is very fragmented: “Coca-Cola doesn’t have a broad, global portfolio in this growing category”, CEO James Quincey says on a blog, and “Costa is a good fit – and the best way – for Coca-Cola to add a global coffee platform that will complement our existing system.”

Coca-Cola is not alone in this struggle to move from a company with a very unhealthy image to one that offers healthier brands: this acquisition comes just days after eternal rival PepsiCo bought Sodastream, a company that lets you make your own carbonated drinks, for 2.8 billion euro.