Coca-Cola Considers Selling Costa After Disappointing Results
Keurig Dr Pepper Accelerates Expansion with European Coffee Acquisition
Coca-Cola and Keurig Dr Pepper, both of which entered the global coffee market, are now taking divergent paths. While Coca-Cola is considering selling the British coffee chain Costa, Keurig Dr Pepper is accelerating its business expansion by pursuing the acquisition of a European coffee company.
On August 25, Yonhap News, citing Reuters, reported that Coca-Cola has begun preliminary discussions with potential buyers regarding the sale. According to the report, Coca-Cola is negotiating with a small group of candidates, including private equity funds, about the sale, and industry insiders predict that preliminary bids could come as early as this fall. However, the sale has not yet been finalized.
Coca-Cola acquired Costa Coffee in 2018 for $5 billion (approximately 6.9 trillion won) in an effort to strengthen its competitiveness in the global coffee market against rivals like Starbucks and Nestle. However, in a recent earnings announcement, Coca-Cola CEO James Quincey stated, "From an investment viability perspective, the Costa investment is not where we wanted it to be," effectively admitting that the results have not met expectations.
Meanwhile, another American soft drink company, Keurig Dr Pepper, is taking the opposite approach by expanding its coffee business. According to Yonhap News, which cited The Wall Street Journal (WSJ) on the same day, Keurig Dr Pepper is in the final stages of negotiations to acquire JDE Peet's, a European coffee company headquartered in Amsterdam, Netherlands, for about $18 billion (approximately 25 trillion won). After the acquisition, the company is also considering separating its beverage and coffee businesses.
Keurig sells coffee, coffee brewers, lemonade, and fruit drinks, while Dr Pepper produces carbonated beverages. The WSJ reported that the coffee sector has long struggled due to intense competition in the industry.
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