Coca-Cola is reconsidering its investment in Costa Coffee, admitting it hasn’t met expectations. Reports suggest the company is exploring a sale, potentially at a significantly reduced price from the $5.1 billion acquisition in 2018. Costa’s revenue has declined, and competition in the US market remains fierce.

Costa’s business in the US focuses on B2B and packaged goods, with 250 Smart Café machines nationwide. Globally, Costa has 4,000 stores in over 50 countries and 14,000 Smart Café machines. Costa launched an RTD iced coffee line in 2024, but faces challenges in a competitive market.

Coca-Cola’s acquisition of Costa Coffee before COVID led to supply chain issues and inflation challenges post-lockdown. Arabica coffee prices have fluctuated due to weather events, reaching record highs in 2025. The company’s stock has gained 11% year to date, outperforming the S&P 500.

Costa’s potential growth lies in expanding RTD offerings, especially in international markets. Coca-Cola’s lack of clear commitment to Costa as a test-and-learn project has hindered its progress. Rival Starbucks aggressively competes in the US market through a joint venture with PepsiCo.

Consumer Edge senior analyst Connor Rattigan suggests Coca-Cola may not recoup its initial investment in Costa. CEO James Quincey has a history of cutting losses, as seen in the company’s brand portfolio reduction in 2020. Despite revenue growth, global unit case volumes declined by 1%.

Read more at Yahoo Finance: Coca-Cola’s failed coffee investment faces uncertain future as sale rumors brew