Coca-Cola Considers Selling Costa Coffee

Coca-Cola has engaged with Lazard, an investment bank, to explore various options, including the potential sale of its British coffee chain, Costa Coffee, according to sources who spoke with Reuters on Sunday.

As for immediate comments, Coca-Cola, Costa, and Lazard were unavailable during normal business hours to provide insights regarding the situation.

The company is reportedly beginning discussions with a small group of potential bidders for Costa, which includes private equity firms. This information was initially shared by Sky News, though their source remains unspecified.

Expected proposals from interested parties are likely to come in early fall, though the sales process appears to be uncertain, as noted by Sky.

Coca-Cola had acquired Costa Coffee for over $5 billion back in 2018 in an effort to bolster its standing within the competitive global coffee market, where it vies with heavyweights like Starbucks and Nestlé.

With operations in over 50 countries, the potential sale of Costa adds to a broader trend within the packaged food sector. Companies are taking more actions to adapt amidst rising inflation and a push toward healthier consumer choices.

In a recent earnings call, Coca-Cola’s CEO James Quincey mentioned that the company’s investment in Costa has not met their expectations, saying they are reflecting on insights gained so far and considering new paths to nurture growth in the coffee sector.

Additionally, food companies in the U.S. are increasingly seeking healthier options as part of their response to campaigns like Robert F. Kennedy Jr.’s Make America Healthy initiative. Recently, Coca-Cola also committed to using real cane sugar in its U.S. products.