Coca-Cola is weighing a Costa Coffee sale, reviewing strategic options for the British café chain. The company has brought in investment bank Lazard to examine alternatives, according to reports.
Discussions have already started. Sky News revealed that Coca-Cola has held early talks with several potential buyers, including private equity firms. Sources say indicative offers could land later this year. A deal is possible, but not guaranteed.
The move signals Coca-Cola’s willingness to reassess its coffee bet. While the process is early, insiders confirm that Lazard has been tasked with mapping scenarios for a potential Costa Coffee sale.
Coca-Cola acquired Costa in 2018, pitching it as a global counterweight to Starbucks and Nestlé. The deal gave it more than 4,000 outlets worldwide, including 2,700 in the UK and Ireland. Yet Costa has not matched expectations.
The numbers show the strain. In 2023, revenue rose 9% to £1.22 billion, but profit collapsed into a £9.6 million pre-tax loss, reversing a £245.9 million gain in 2022. High input costs, rising bean prices, and crowded high streets have eroded margins. Even small branches in Andover and Lyme Regis have shut.
Analysts warn the Costa Coffee sale may yield just £2 billion far below Coca-Cola’s purchase price. That reflects skepticism around consumer trends and Costa’s patchy performance. Still, its scale remains valuable, one of the few brands able to challenge Starbucks globally.
Coca-Cola CEO James Quincey has admitted the deal failed to deliver on the “original investment hypothesis.” He maintains that Costa still runs solidly day-to-day. Industry watchers see the rethink as part of a broader portfolio reset driven by inflation, health trends, and sustainability demands.
If a Costa Coffee sale happens, it could redraw the global café landscape. If not, Coca-Cola may attempt sweeping internal changes. Either way, the bold café experiment is at a decisive moment.
