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NEW YORK — Coca-Cola announced plans today to purchase Costa Coffee for $5.1 billion. As of 2016, the British coffee shop is the world’s second-largest coffee chain, according to a report by the chain’s parent company Whitbread.
The deal puts Coca-Cola directly in the competitive coffee market with competitors such as:
- Starbucks.
- Nestle, which owns Nescafe and the Blue Bottle chain.
- JAB Holding Co., which owns Caribou Coffee, Krispy Kreme, Peet’s Coffee and Panera.
With Pepsi’s purchase of SodaStream earlier this month, competition in the soda industry continues to increase and diversify.
Coca-Cola chief executive officer James Quincey commented on the intent of the Costa Coffee deal in a Friday statement.
“Hot beverages is one of the few segments of the total beverage landscape where Coca-Cola does not have a global brand,” Quincey said. “Costa gives us access to this market with a strong coffee platform.”
Beyond coffee shops, he said that that Costa would provide an important growth area ranging from beans to bottled drinks in an attractive category, growing by around 6% a year.
