Coca-Cola Looks to Restructure Costa Coffee After Failed Sale Attempt – CoffeeTalk

Coca-Cola has enlisted the assistance of restructuring experts from AlixPartners and Alvarez & Marsal for its Costa Coffee chain following a failed attempt to sell the business. The consultancy firms will conduct an operational review and provide financial advice, respectively, as Coca-Cola moves to address Costa’s financial difficulties after a protracted auction yielded no suitable buyer. Costa Coffee, which operates around 2,700 locations in the UK and over 1,300 internationally, has experienced significant challenges in recent years, reporting operating losses that widened from £5.8 million to £13.5 million in 2024, despite revenues reaching £1.2 billion.

The coffee chain, acquired by Coca-Cola from Whitbread for nearly £4 billion in 2018, aimed to capitalize on the growing coffee market but has struggled to achieve profitability. Consumer pressure regarding rising coffee prices, increased competition from independent shops and budget chains, and surging costs for labor and energy have further compounded these issues. The cost of coffee beans hitting record highs in 2025 also added to the financial strain. For instance, the price of a Costa latte, which was around £2.50 to £3 pre-pandemic, now exceeds £4 in some locations.

In light of these challenges, Coca-Cola’s former CEO, James Quincey, acknowledged that Costa was not meeting expectations, leading to a search for prospective buyers. Several private equity firms, including KKR and Bain Capital, were initially linked to the sale but ultimately withdrew, resulting in Coca-Cola halting the sale process in January. Subsequently, Costa lost its position as the largest coffee chain in Britain to Greggs. There are indications that Coca-Cola may explore selling Costa to its franchisees in the future, rather than seeking an external buyer.

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