FROM FIZZY POP TO COFFEE: Coca Cola buys Costa Coffee in 5.1 Billion US Dollar to dominate Restaurant Business

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Caffeinated beverages are big business with the global coffee shops market worth £127bn

Coca-Cola buys Costa Coffee from Whitbread for 5.1 Billion US Dollar

The world is increasingly hooked on caffeine. Globally the coffee shop trade alone is now worth $165bn (£127bn), which reflects the march of coffee culture.

“Over the last 20 years coffee has changed from a commodity into a lifestyle product as first of all consumers in western markets woke up to its appeal thanks to branded chains like Starbucks and Costa,” said Jeffrey Young, the chief executive of coffee analysts Allegra Group. “As they’ve opened stores overseas that coffee culture has subsequently moved to Asia and other developing markets, which explains the huge overall sales potential.”

“The prize of Costa [for Coca-Cola] lies not in the mature UK market but in its international potential,” said Jonny Forsyth, a Mintel analyst. In China, for example, Mintel has predicted that the coffee market would surge by nearly 40% to be worth RMB102bn (£11.5bn; $14.9bn) by 2022. The explosion of interest in coffee outlets has been so big that for the next five years Starbucks has planned to build a new coffee shop every 15 hours in China.The research firm Mintel estimated that the global coffee shops market was worth £127.3bn ($165bn) in 2017, while another £43.2bn ($56bn) worth was sold in shops – whether as beans or the increasingly popular pods used by consumers playing barista at home.

“Coffee culture is also evolving rapidly in wider Asia and is one of the main reasons that Nestlé recently bought the rights to sell a range of Starbucks brands, added Forsyth. “Most of Asia has traditionally been a tea-drinking culture but as consumers adapt more to western-style, ‘white-collar’ urban lifestyles, consumers are increasingly reaching for coffee.”

He said: “Coca-Cola face the long-term problem that people are moving away from soda and towards healthier or more functional drinks like coffee. Twenty years ago people would have a coffee in the morning and a coke in the afternoon. Today’s consumers are now more likely to have a hot coffee in the morning and a cold coffee in the afternoon.

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