Coca-Cola’s exploration of a potential sale comes as part of a broader strategic review of its investments, particularly in the competitive global coffee market. The company acquired Costa Coffee for over $5 billion in 2018, aiming to bolster its presence in the coffee sector and challenge industry giants like Starbucks and Nestlé. Costa, a British multinational coffeehouse chain founded over 50 years ago by two brothers, has grown into a global brand with operations in 50 countries. However, Coca-Cola’s Chief Executive Officer, James Quincey, recently acknowledged that the investment has not met the company’s expectations. “Our investment in Costa is not where we wanted it to be from an investment hypothesis point of view,” Quincey stated during a recent earnings call, as reported by Reuters. He emphasized that the company is reflecting on its learnings and exploring new avenues for growth in the coffee category while continuing to operate Costa successfully.
The potential divestiture of Costa Coffee aligns with broader trends in the packaged foods and beverage industry, where companies are navigating challenges such as price inflation and a growing consumer preference for healthier options. A sale of Costa could contribute to the wave of deals in this sector, as firms seek to scale operations and adapt to evolving market demands. For Coca-Cola, offloading Costa could allow the company to refocus resources on its core beverage portfolio or invest in new growth areas within the coffee or adjacent markets.
Neither Coca-Cola, Costa Coffee, nor Lazard responded to inquiries from Reuters regarding the potential sale, leaving some uncertainty about the timeline and outcome of the discussions. Meanwhile, Coca-Cola’s stock performance reflects a mixed market response. On Friday, August 22, 2025, the company’s shares closed 0.75% lower at $70.13 on the New York Stock Exchange, though they edged up 0.10% in after-hours trading. With a market capitalization of $301.82 billion, as reported by MarketWatch, Coca-Cola remains a heavyweight in the global beverage industry, but its strategic maneuvers suggest a cautious reassessment of its diversification efforts.
Costa Coffee’s journey under Coca-Cola’s ownership has been marked by ambition but also challenges. The 2018 acquisition was a bold step to capture a larger share of the rapidly growing coffee market, driven by increasing global demand for premium coffee experiences. Costa’s extensive footprint and brand recognition made it an attractive asset, but integrating and scaling the chain in a competitive landscape has proven complex. Quincey’s comments suggest that Coca-Cola is now weighing whether owning a coffeehouse chain aligns with its long-term vision or if alternative strategies, such as partnerships or innovation in coffee-based beverages, might better serve its goals.
As the company awaits indicative offers, the potential sale of Costa Coffee could mark a significant pivot for Coca-Cola. Whether this move signals a retreat from the coffeehouse sector or a strategic realignment remains to be seen. For now, the beverage giant is keeping its options open, balancing the need to manage a successful Costa business with the pursuit of new opportunities in a dynamic global market.