Coca-Cola’s $5.1 billion acquisition of Costa Coffee in 2018 was intended to secure a significant presence in the global coffee market. However, eight years on, the deal has underperformed relative to initial expectations, hindered by costly vending machine rollouts, a challenging U.S. expansion, and operational difficulties in running coffee shops.
Purchased from British hospitality company Whitbread, Coca-Cola aimed to leverage Costa’s established brand and extensive global distribution network to expand automated coffee machines—as well as ready-to-drink coffee products—across multiple markets. While the coffee chain continues to operate more than 2,700 outlets primarily concentrated in the United Kingdom and Ireland, efforts to replicate its British success abroad have largely fallen short.
The company’s ambitious rollout of Costa Express machines—automated kiosks offering espresso-based drinks made with fresh coffee beans and milk—faced unexpected complications. Coca-Cola initially expected to install tens of thousands of these machines worldwide, capitalizing on its own proven global vending machine infrastructure. Yet, the integration of Costa’s coffee offerings with Coca-Cola’s network proved more challenging than anticipated, particularly in the United States.
Industry observers cite a combination of factors for this difficulty, including Costa’s relatively low brand recognition in the U.S. and American consumers’ preference for lower-priced drip coffee typically found at gas stations and convenience stores. According to Jason Cotta, a former Costa managing director, the assumption that Coca-Cola’s vending expertise could seamlessly translate into coffee machine placements was overly optimistic.
In 2025, Costa reported a 5 percent revenue increase to £1.29 billion, marking a return to operational profitability with an operating profit of £20.4 million, compared to a £13.5 million operating loss the previous year. This turnaround, supported by revenue growth acceleration in early 2026, suggests improving performance despite prior setbacks.
Coca-Cola had previously explored selling Costa in 2025, but negotiations were halted due to disagreements over valuation. The company currently states it is not pursuing a sale. In a recent statement, Coca-Cola reaffirmed its commitment to Costa Coffee, emphasizing that coffee remains a key part of its broader beverage strategy and that the brand’s recent actions are yielding positive results.
When announcing the acquisition, then-CEO James Quincey described Costa as “more than just a brand,” positioning it as a scalable platform for growth beyond Coca-Cola’s traditional soft drink portfolio. Despite challenges, Coca-Cola continues to view Costa as a vital component of its future ambitions in the expanding global coffee and tea market, which is estimated to be worth $570 billion.