Costa could be seen ‘absolutely everywhere’, including pubs

31-Aug-2018 - Last updated on 31-Aug-2018 at 15:15 GMT

Pricey beans: Coca-Cola buys Costa for £3.9bn

Coca-Cola’s acquisition of Costa from Whitbread could result in the brand being seen "everywhere", including vending machines, hotels, restaurants, pubs and cafés.

That’s according to Whitbread chief executive Alison Brittain on Radio 4’s Today programme this morning (31 August).

Brittain said: “They want the coffee product, they have no coffee in their range. You could see Costa absolutely everywhere, in vending machines, hotels, restaurants, pubs, cafés – all the places you see Coke today.”

Coca-Cola acquired Costa from Whitbread in a £3.9bn deal, after the latter acquired the chain in 1995 for £19m.

Costa, now the UK’s largest coffee chain, had just 39 outlets in the 1990s and has since grown to 2,400 shops in the UK, with an additional 1,400 across the globe.

What Costa offers Coca-Cola

The purchase of Costa offers Coca-Cola a scalable coffee platform, along with the know-how and expertise in a fast-growing category, which the company is eager to step into.

Coca-Cola already has several caffeinated products on supermarket shelves, but the company’s president and CEO James Quincey said the buyout would allow the soft drinks giant to grow its reach in the segment.

“Costa gives Coca-Cola new capabilities and expertise in coffee, and our system can create opportunities to grow the Costa brand worldwide,” said Quincey in a statement.

“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.”

Coffee is one of the fastest-growing beverage segments in the world, with sales increasing by 6% in the past 12 months.

In the UK, last year, the coffee shop market grew by 7.3% to a value of £9.6bn, Allegra’s World Coffee Portal data showed.

New coffee shops in the UK

Within the period, the UK gained 1,215 new coffee shops, reaching a total of 24,061 in 2017.

The market is dominated by three chains, including Costa, Starbucks and Caffè Nero, with executives in the segment optimistic about the future of the UK coffee shop market, according to the report.

Coffee shops, however, pose a threat to the UK pub, commentators in the on-trade have warned over the years.

The British pub, however, has declined in numbers, particularly since the smoking ban came into force in 2007.

Last year, 18 UK pubs closed every day according to Campaign for Real Ale figures, while the total number of boozers has fallen from over 60,000 in the year 2000 to slightly more than 50,000 in 2016.