Costa Coffee

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Costa Limited
Subsidiary
IndustryCoffee shop
Founded1971; 47 years ago (1971)
London, England
FounderBruno Costa
Sergio Costa
HeadquartersDunstable, Bedfordshire, England
Number of locations
Increase 3,401 (2016)
Area served
Worldwide
Key people
Dominic Paul (CEO)
ProductsCoffee, tea, sandwiches, sweet snacks and iced drinks
RevenueIncrease £1.167 billion (2016)[1]
Increase £153 million (2016)[1]
ParentThe Coca-Cola Company
(2018-present)
Websitecosta.co.uk

Costa Coffee is a British multinational coffeehouse company headquartered in Dunstable, Bedfordshire, and a wholly owned subsidiary of Whitbread. The Coca-Cola Company announced its intention of acquiring Costa Limited from parent company Whitbread PLC for $5.1 billion. This deal, expected to close in the first half of FY 2019, would give the cola giant a strong coffee platform across parts of Europe, Asia Pacific, the Middle East, and Africa. [2]It is the second largest coffeehouse chain in the world, and the largest in the UK. On 31 August 2018, it was announced that Coca-Cola intends to purchase the chain for £3.9bn, a deal that is expected to complete in the first half of 2019.[3][4]

Costa Coffee was founded in London in 1971 by the Costa family as a wholesale operation supplying roasted coffee to caterers and specialist Italian coffee shops. Acquired by Whitbread in 1995, it has since grown to 3,401 stores across 31 countries. The business has 2,121 UK restaurants, over 6,000 Costa Express vending facilities and a further 1,280 outlets overseas (including 460 in China).[1][5]

History[edit]

Brothers Bruno and Sergio Costa founded a coffee roastery in Lambeth, London, in 1971, supplying local caterers. The family had moved to England from Parma, Italy, in the 1960s.[6][7] Costa branched out to selling coffee in 1978, when its first store opened in Vauxhall Bridge Road, London.

In 1985, Sergio bought out Bruno's share of the company. Bruno went on to found a tableware company.[8] By 1995, the chain had 41 stores in UK,[9] and was acquired by Whitbread, the UK's largest hotel and coffee shop operator, becoming a wholly owned subsidiary. In 2009, Costa opened its 1,000th store in Cardiff. In December 2009, Costa Coffee agreed to acquire Coffee Heaven for £36 million, adding 79 stores in central and eastern Europe.[10]

In 2018, Whitbread faced pressure from two of its largest shareholders, activist group Elliot Advisers and hedge fund Sachem Head to sell or demerge Costa Coffee, the theory being the individual businesses would be worth much more than as one company.[11] On 25 April 2018, Whitbread announced its intention to fully demerge Costa within two years.[12] Subsequently Coca-Cola announced a deal to acquire the chain.[4]

Products[edit]

Coffee served in a Massimo cup.

Costa sells:

  • Hot drinks - coffees, teas and hot chocolates
  • Cold drinks - including Frostino and fruit coolers
  • Savoury snacks - including sandwiches and breakfast items
  • Cakes and pastries - including cookies, brownies and croissants

Costa Coffee moved its own roastery from Lambeth to Basildon, Essex, in May 2017 with an investment of £38 million, increasing the roasting capacity from 11,000 to 45,000 tons of coffee beans per year.[13]

Costa Coffee employs Gennaro Pelliccia as a coffee taster, who had his tongue insured for £10m with Lloyd's of London in 2009.[14][15]

Operations[edit]

Locations[edit]

A Costa Coffee branch in Forster Square Retail Park, Bradford
A standard Costa Coffee branch in Cyprus

Costa Coffee operates 2,121 outlets in the United Kingdom as of May 2016. Internationally, it operates 1,280 stores throughout the world in 31 countries.[16] The first Costa store outside the UK opened in Dubai in 1999[17] and, in September 2017, was the first coffee shop worldwide to start delivering coffee via drones to customers sunbathing on Dubai beaches.[18]

Costa Express[edit]

Following Whitbread's £59.5m acquisition of Coffee Nation, a chain of coffee machines, the machines were re-branded as Costa Express.[19] The company plans to expand to target hospitals, universities and transport interchanges.[20] In Canada and Denmark, Costa Express machines are located in Shell stations.


Costa Book Awards[edit]

Costa Coffee has been the sponsor of the Costa Book Awards (formerly the Whitbread Book Awards) since 2006.[21]

See also[edit]

References[edit]

  1. ^ a b c "Archived copy" (PDF). Archived from the original (PDF) on 14 August 2016. Retrieved 15 April 2017.
  2. ^ Team, Trefis. "Why Is Coca-Cola Paying A Hefty Premium For Costa Coffee?". Forbes. Retrieved 30 October 2018.
  3. ^ Monaghan, Angela (31 August 2018). "Whitbread sells Costa Coffee to Coca-Cola for £3.9bn - business live". The Guardian. Retrieved 31 August 2018.
  4. ^ a b "Coca-Cola to buy Costa coffee for £3.9bn". BBC News. 31 August 2018. Retrieved 13 September 2018.
  5. ^ "Whitbread" (PDF).
  6. ^ "Costa Coffee founder: My hometown Purley has too many coffee shops". Croydon Advertiser. 16 October 2012. Retrieved 15 February 2015.
  7. ^ "Costa Experience - The Journey from Bean to Cup - Costa Coffee". Costa Coffee. Retrieved 6 April 2014.
  8. ^ Adams, Guy (2 May 2013). "The man who founded Costa Coffee - then sold out for a fraction of its value now - insists he's not bitter. So... WHY does Mr Costa refuse to drink his own coffee?". Daily Mail. Retrieved 15 February 2015.
  9. ^ "Costa - Our History". whitbread.co.uk. Whitbread. Retrieved 15 February 2015.
  10. ^ Nick Fletcher. "Flat white froths up Costa Coffee's fortunes". the Guardian.
  11. ^ "Business Sale Report - Will Costa Coffee chain be up for sale soon". business-sale.com. 22 April 2018. Retrieved 22 April 2018.
  12. ^ "Whitbread Group Structure Update". whitbread.co.uk. 25 April 2018. Retrieved 25 April 2018.
  13. ^ "Costa Coffee Roastery, Basildon, Essex - Food Processing Technology". foodprocessing-technology.com. Retrieved 31 August 2018.
  14. ^ "Costa Coffee: The Perfect Cup".
  15. ^ "Costa Coffee taster: Ten of the weirdest insurance policies". Telegraph.co.uk. 9 March 2009.
  16. ^ "Whitbread annual report 2015/16" (PDF). Whitbread. Archived from the original (PDF) on 14 August 2016.
  17. ^ Emirates, Mall of the. "Costa Coffee in Dubai Mall of the Emirates".
  18. ^ "Watch: drone delivers Costa coffee on Kite Beach in Dubai". Retrieved 31 August 2018.
  19. ^ "Growing Business Success Stories - Costa Express: Scott Martin 10 June 2011". Archived from the original on 10 September 2011.
  20. ^ Zoe Wood. "Coffee Nation – fast, fresh and £2 a cup". the Guardian.
  21. ^ Pauli, Michelle (28 November 2006). "Costa kicks off prize sponsorship with populist shortlist". the Guardian.

External links[edit]

Media related to Costa Coffee at Wikimedia Commons