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Coca-Cola wants to sell its coffee chain Costa Coffee to refocus on soft drinks. The British coffee company, which Coca-Cola acquired in 2018, was never able to live up to high expectations.
Diversify
In 2018, Coca-Cola paid a whopping 4.4 billion euros for Costa Coffee. However, analysts now believe the soft drink giant paid way too much for the coffee chain: a sale would now only fetch Coca-Cola half of that today.
At the time, the beverage group wanted to further diversify its offering with alternatives for health-conscious consumers. “Hot beverages are one of the few segments of the overall beverage landscape where we do not yet have a global brand”, CEO James Quincey said at the time. “Costa gives us access to this market with a strong coffee platform.”
Losing
However, the coffee brand has not managed to live up to those expectations, as competition in the coffee market increased, coffee prices skyrocketed and premium coffee became more popular. In 2023, Costa Coffee posted lower sales than at the time of the acquisition and suffered a loss of almost ten million pounds, De Tijd reports.
In 2023, Belgian Philippe Schaillee became CEO of Costa Coffee. At the opening of a first Belgian branch of the chain, in February 2024 at the Liège-Guillemins train station, he still had big ambitions: the brand saw potential for ten Belgian branches. However, eighteen months later, the chain is still stuck with that one Belgian location.
Interestingly, the divestiture of Costa Coffee is not the only proposed coffee spin-off today. This morning, Dr Pepper announced its intention to divest Keurig and incorporate it into the JDE Peet’s coffee portfolio.
