Sat 23rd Aug 2025 - Coca-Cola explores Costa sale Coca-Cola explores Costa sale: The Coca-Cola Company is exploring a sale of Costa, Britain’s biggest high street coffee brand, more than six years after acquiring the business in a move aimed at helping it reduce its reliance on sugary soft drinks. Coca-Cola is working with bankers to hold exploratory talks about a sale of Costa, reports Sky News. Initial talks have already been held with a small number of potential bidders, including private equity firms, City sources said. Lazard, the investment bank, is understood to have been engaged by Coca-Cola to review options for Costa and gauge interest from prospective buyers. Indicative offers are said to be due in the early part of the autumn, although one source cautioned Coca-Cola could yet decide not to proceed with a sale. Costa trades from more than 2,000 stores in the UK, and well over 3,000 globally, according to the latest available figures, and has a global workforce of around 35,000. Analysts said a sale could crystallise a multibillion pound loss on the £3.9bn sum Coca-Cola agreed to pay to buy Costa from Whitbread, the London-listed owner of the Premier Inn hotel brand, in 2018. One suggested that Costa might now command a price tag of just £2bn in a sale process. The disposal proceeds would, in any case, not be material to the Atlanta-based Coca-Cola, which had a market capitalisation at Friday's (22 August) closing share price of $304.2bn (£224.9bn). At the time of the acquisition, Coca-Cola's chief executive, James Quincey, said: “Costa gives Coca-Cola new capabilities and expertise in coffee, and our system can create opportunities to grow the Costa brand worldwide. 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.” Latest available accounts filed at Companies House for Costa show turnover increased 9% to £1,222,856,000 for the year ending 31 December 2023 compared with £1,117,450,000 the previous year. However, this was below the £1.3bn recorded in 2018, the final year before Coca-Cola took control of the business. Coca-Cola has been grappling with the weak performance of Costa for some time, with Quincey saying on an earnings call last month: “Our investment in Costa is not where we wanted it to be from an investment hypothesis point of view. I mean, the business is still a good business, but it’s not quite delivered on the different verticals of growth that we were hoping to accelerate much quicker – the ready-to-drink coffee, the express and the at-home – and therefore, the business remains more weighted towards stores. And in the stores, we’ve been driving the affordability and actually doing a good job on refreshing the stores and driving the speed of service. But still, the investment hypothesis as originally intended has not played out, despite the improvement in the store business. So, I think I would say we’re in the mode of reflecting on what we’ve learned, thinking about how we might want to find new avenues to grow in the coffee category while continuing to run the Costa business successfully, because it’s still a lot of money we put down, and we want that money to work as hard as possible.” Filings show Costa has paid more than £250m in dividends to its owner since the acquisition. The deal was intended to provide Coca-Cola with a global platform in a growing area of the beverages market. Costa trades in dozens of countries, including India, Japan, Mexico and Poland, and operates a network of around 1,200 coffee vending machines internationally under the Costa Express brand. Costa was founded in 1971 by Italian brothers Sergio and Bruno Costa and was sold to Whitbread for £19m in 1995, when it traded from fewer than 40 stores. Coca-Cola communications executives in the US and UK did not respond to a series of emails and calls from Sky News seeking comment on its plans for Costa. A Lazard spokesperson declined to comment. Costa features in the Propel Turnover & Profits Blue Book, which is available exclusively to Premium Club subscribers and features 1,151 companies. Costa’s turnover of £1,222,856,000 is the 11th highest in the database. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers. Email kai.kirkman@propelinfo.com to upgrade your subscription.