Coca-Cola plans to buy out popular british coffee-chain Costa
On August 31, 2018, the company Coca-Cola, famous for its soda by the same name, made a deal with Costa, a popular British-owned coffee-chain, for 5.1 billion dollars (about 3.9 billion pounds), according to USA Today. Coca-Cola says they have multiple reasons for this deal.
Coca-Cola’s CEO James Quincey said that “Hot beverages are one of the few remaining segments of the total beverage landscape where Coca-Cola does not have a global brand,” according to the Associated Press. Coca-Cola also says they are going into this deal for “healthier beverages.”
Coca-Cola already bought the Georgia and Gold Peak coffee brands, which make bottled and canned coffee, but the purchase of Costa could allow it to go up to the ranks of companies like Starbucks. Quincey also added that “coffee is growing by 6 percent a year, making it one of the fastest-growing beverage categories in the world.”
Even though Costa doesn’t really have a presence in North America, Costa has vending machines, which Quincey is planning to scatter around North America and place the drinks in popular stores around the nation. Costa even has self-serve machines which they plan to bring over.
Whitbread, the company that bought Costa when it only had a few stores in 1995, has heavily invested in Costa since they bought it, and they are even planning to bring it to popular eastern-inn Premier-Inn. Coca-Cola gave Whitbread an offer that Whitbread said was “highly compelling.” They unanimously backed the deal.
Coca-Cola has recently been making a lot of similar deals. According to the Associated Press, “earlier in August it was buying a minority ownership stake in sports drink maker BodyArmor for an undisclosed amount. Coca-Cola’s other investments in recent years have included milk that is strained to have more protein and a push into sparkling water.” Coca-Cola, though, already has over 500 popular brands, such as Fanta, Sprite, and even Powerade.
Another reason Coca-Cola might be buying so many brands is its rival, PepsiCo. PepsiCo recently bought out Soda Stream, which is a popular product that lets you make carbonated beverages with C02 and flavoring packs that taste like the store-brand ones. PepsiCo announced that, since they bought Soda Stream, Soda Stream will now have Pepsi drink flavoring, instead of its generic Cola flavoring.