Dubai – Qahwa World
Coca-Cola is reconsidering its coffee strategy after its $5.1 billion acquisition of Costa Coffee failed to deliver the expected results.
CEO James Quincey admitted during the company’s recent earnings call that the “investment hypothesis didn’t work out as we expected.” The beverage giant had hoped Costa would drive significant growth beyond its traditional retail outlets, but that expansion has not materialized.
Despite the setback, Quincey emphasized that coffee remains a “super attractive category,” noting that Coca-Cola continues to invest in Costa’s UK operations and in expanding automated coffee machines under the Costa brand. However, he acknowledged that the business “hasn’t yet created the multiplier effect we were looking for.”
Coca-Cola is currently “reflecting” on how to position its coffee business moving forward. Reports from Reuters in August indicated that the company may be exploring a potential sale of Costa Coffee, though Quincey did not comment on that possibility.
Coca-Cola’s stock rose about 4% on Tuesday following its announcement that net sales increased by 5% to $12.46 billion in the third quarter.
The company’s coffee ventures also include experiments with Coca-Cola Coffee, a beverage blending the brand’s classic soda with coffee extract.
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