Coca-Cola is considering selling Costa Coffee, acquired for £3.9bn in 2018. With over 2,000 UK stores and a global presence, Costa’s revenues in 2023 were £1.22bn. Despite operational challenges and a loss of nearly £14m, Coca-Cola’s CEO admits the investment didn’t meet expectations. Analysts suggest a potential sale could fetch £2bn.

Industry watchers believe selling Costa Coffee could allow both businesses to focus on their strengths. While Costa remains a well-established brand, it hasn’t unlocked new growth under Coca-Cola’s ownership. The sale would align with Coca-Cola’s asset-light philosophy and free up capital for higher-velocity brands.

Consulting director Ivan Torossian notes that a potential sale of Costa Coffee would not only be a retreat but also a portfolio discipline move for Coca-Cola. Costa’s retail estate doesn’t align with Coca-Cola’s core strengths in brand building and distribution. Selling Costa would allow Coca-Cola to focus on its key beverage categories and adjacent markets. Coca-Cola is considering selling Costa Coffee to focus on high-margin, scalable coffee formats like RTD products. Potential bidders like Apollo Global Management and TDR Capital have emerged, with Keurig Dr Pepper’s splitting into two entities after acquiring JDE Peet’s, sparking speculation on a potential suitor for Costa. Coca-Cola’s future in coffee remains uncertain.

Read more at Yahoo Finance: Should Coca-Cola sell Costa Coffee?