Soft drink giants Coca-Cola have just announced plans to purchase Costa Coffee from current owners Whitbread for a whopping £3.9bn. While they’ve been expanding their catalogue of businesses in recent years, such as their successful acquisition of Innocent Drinks in 2013, this is their first move into the UK coffee market. Having the backing and resources of such a huge brand can only mean positive things for Costa, but what more can we expect from a brand that already dominates the high street?
What does this mean for Costa?
As Costa are already the biggest and most well-known coffee shop in the UK, there isn’t a great deal further they can expand in the domestic high street market, but with support of Coca-Cola it seems likely that they could continue to push their international presence. Costa already has stores in countries such as Dubai and China, but could the recognition that comes along with their new owners encourage them to attempt to enter more competitive markets such as the US and Canada?
As well as international expansion, another place Coca-Cola could provide a huge push would into more commercial products in the UK. You can already buy Costa coffee in supermarkets, but with the experience of the biggest soft drink company on the planet it seems like an obvious move to try their hand at chilled coffee beverages, such as the popular Starbucks Doubleshot drink. We could even see the two brands collaborate by using Costa beans in coffee flavoured cola drinks like the ones recently launched in Asia.
The added exposure that comes with this acquisition will only help to solidify their grip on the UK coffee market, making it even more difficult for the smaller independent coffee shops to compete. Unless you’re in an area with a strong local following, or a real demand for gourmet coffee, many small businesses may find themselves struggling to keep up.
An alternative business model that seems to have been successful in recent years is to use coffee as a secondary offering alongside something like a restaurant or café. Chains like McDonalds and Greggs have hugely improved their coffee options in the last couple of years and have been finding real success with a more hybrid approach. Many smaller businesses may find that diversifying their menu is a great way to stay relevant in an even tougher marketplace.
Selling coffee alongside a full food menu can be tough, and you will need to take steps to streamline your process as much as possible to keep the profit margins high. For restaurants or cafés that still want be able to offer hand made beverages, the automated grinding and tamping that comes with the WMF Espresso is the perfect compromise between the two worlds. You can save time and money without sacrificing the quality of the product.
For establishments like take-away restaurants or bakeries that rely on speed, hand made coffee may not be a viable option. While you need to make drinks quickly to keep your customers happy, it shouldn’t have to come at the expense of quality. With bean to cup machines like the WMF 9000 S+, you can make up to 350 drinks per hour, consistently producing a delicious coffee every single time.
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