Coca-Cola plans to use its logistics network to boost the expansion of Costa, with the aim of dethroning Starbucks.
Coca-Cola announced the acquisition of Costa, one of the most popular coffee chains in Europe, for 5,100 million dollars.
Analysts believe that Coca-Cola seeks to extend its dominance of healthier beverages. In addition, with this agreement will compete with the business signed between Starbucks and Nestlé.
The purchase was made to Whitbread, owner of Costa, and includes almost 4,000 stores. The agreement was made for 1,300 million dollars more than some analysts had calculated.
Coca-Cola plans to use its logistics network to boost Costa’s expansion, with the goal of dethroning Starbucks and its 29,000 stores across 77 countries.
In addition to the coffee shops, Costa has bottled and grain coffee lines, which has expanded around the world at an annual rate of 6%.
James Quincey, CEO of Coca-Cola, said his company “did not have a global portfolio in this important category.”
But Coca-Cola does not have it easy, because other competitors have already worked on expanding their brands, to attract younger consumers. For this reason, they have used several strategies, ranging from intensive barista training to the development of more exotic beverages.
An example of this is that Nestlé, the leader in the packaged coffee market, signed an agreement with Starbucks to be able to market bottled beverages with the siren brand.
Coca-Cola seeks to expand Costa in the United States, which could put in check brands such as Starbucks and McDonald’s, which recently began to compete in the coffee shop market.