Why Coca-Cola's $5 Billion Bet On Costa Coffee Hasn't Gone As Planned – CoffeeTalk

Coca-Cola’s $5 billion acquisition of Costa Coffee has not gone as planned, according to its CEO James Quincey. The company, which acquired Costa Coffee seven years ago, aimed to gain a foothold in the coffee industry, which it considered a key growth area. However, the investment hypothesis did not work out as expected, and Coca-Cola is now reflecting on its coffee business. The company made most of its money-selling drink concentrates and other ingredients to partner companies that manufacture and sell beverages that customers buy in restaurants and stores.

Coca-Cola has invested in Costa’s UK stores and expanded the use of automated coffee machines that use the Costa name. However, the business has not created a multiplier so far that the company is looking for. Coca-Cola is “reflecting” on what its coffee business should look like going forward. In August, Reuters reported that Coca-Cola was working with an investment bank to explore a sale of Costa. However, Quincey did not address a potential sale of Costa on Tuesday’s call.

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