Coca-Cola is buying the British coffee chain Costa Coffee for $US5.1 billion, it was announced on Friday.
However, I can’t work out why.
The obvious answer is because Costa has, for many years, dominated the UK coffee market, growing from 39 to nearly 4,000 outlets worldwide in 13 years.
It is China’s second-biggest coffee chain behind Starbucks, boasting over 400 stores (and counting) in the country.
In the past financial year, Costa made £1.3 billion ($US1.7 billion) in revenue.
Financially, the buyout might make sense – but I can’t figure out why anyone goes to the coffee chain in the first place.
Costa Coffees are omnipresent in London, where I live, so I recently visited one of the stores for an experience comparable to every other time I have been to a Costa Coffee: utterly underwhelming.
I went to the Costa Coffee on Whitechapel High Street in East London, near Business Insider’s UK headquarters. The area boasts a plethora of chain coffee shops such as Pret a Manger, Caffe Nero, and Starbucks, as well as a smattering of independent stores.
Inside, Costa Coffee is a very bog-standard coffee shop. The decor, much like the food, is bland and inoffensive without being particularly nice. The store has no particular theme or style — it’s just … “coffee shop.”
Costa offers a range of food along with its coffees, including paninis, wraps, and salads. Customers can also buy snacks like crisps and nuts, as well as cold drinks like orange juice and — ironically — Pepsi.
Costa also sells baked goods, from pain aux raisins to millionaire’s shortbread. At this point, staff members told me to stop taking photos — so I did.
I ordered a flat white and a croissant, which came to £3.70 ($US4.80).
The croissant looked and tasted like papier-mâché, and it was inferior to most croissants you can buy for half the price in Britain’s supermarkets. The coffee wasn’t half bad though, despite the cringeworthy pun on the serviette.
It’s not even cheap
One might think that Costa’s ubiquity would drive the price down, but that’s not the case.
While a cappuccino costs about £0.30 less at Costa than at its UK competitors, those prices level out when you get into different sizes and flavours, The Guardian says.
So why would anyone go there?
The simple answer is that often it’s the only place you can go.
Coca Cola presumably acquiring Costa because they were at a quiet regional train station and nothing else was available
— Mike Bird (@Birdyword) August 31, 2018
Costas are ubiquitous in motorway service stations, train stations, and airports.
In one motorway service station between York and Leeds in northern England, there are no fewer than seven outlets where one can buy Costa Coffee, according to The Guardian.
It makes sense too.
“The footfall means that the difference between the volume of coffee we would usually serve in our existing locations and what we would serve in a train station or airport is phenomenal,” Costa’s creative director, Teddy Robinson, told The Guardian earlier this year.
Moreover, Costa Express vending machines can be found in more than 8,000 locations worldwide, often in supermarkets – meaning that even if you’re somehow not near a Costa Coffee, you can still buy Costa coffee.
The reason people go to Costa is not that it’s their favourite coffee chain, but that there’s simply no escaping them.
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