Costa Coffee

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Costa Limited
Subsidiary
IndustryCoffee shop
Founded1971; 48 years ago (1971)
London, England
FounderBruno Costa
Sergio Costa
HeadquartersDunstable, England, UK
Number of locations
Increase 3,882 (2018)
Area served
Worldwide
Key people
Dominic Paul (CEO)
ProductsCoffee, tea, sandwiches, sweet snacks and iced drinks
RevenueIncrease £1.168 billion (2016)[1]
Increase £153 million (2016)[1]
ParentThe Coca-Cola Company
Websitecosta.co.uk

Costa Coffee is a coffeehouse chain which is a subsidiary of American company The Coca-Cola Company. It is headquartered in Dunstable, Bedfordshire.

Costa Coffee was founded in London in 1971 by the Costa family as a wholesale operation supplying roasted coffee to caterers and specialist Italian coffee shops. Acquired by Whitbread in 1995, it was sold in 2019 to The Coca-Cola Company in a deal worth £3.9bn, and has grown to 3,401 stores across 31 countries and 18,412 employees. The business has 2,121 UK restaurants, over 6,000 Costa Express vending facilities and a further 1,280 outlets overseas (460 in China).[1][2]

The Coca-Cola Company announced its intention of acquiring Costa Limited from parent company Whitbread PLC for $5.1 billion. The deal, which closed on 3 January 2019, gives the cola giant a strong coffee platform across parts of Europe, Asia Pacific, the Middle East, and Africa.[3] It is the second largest coffeehouse chain in the world, and the largest in the UK.[4][5]

History[edit]

Brothers Bruno and Sergio Costa founded a coffee roastery in Lambeth, London, in 1971, supplying local caterers. The family had moved to England from Parma, Italy, in the 1960s.[6][7] Costa branched out to selling coffee in 1978, when its first store opened in Vauxhall Bridge Road, London.

In 1985, Sergio bought out Bruno's share of the company. Bruno went on to found a tableware company.[8] By 1995, the chain had 41 stores in UK,[9] and was acquired by Whitbread, the UK's largest hotel and coffee shop operator, becoming a wholly owned subsidiary. In 2009, Costa opened its 1,000th store, in Cardiff. In December 2009, Costa Coffee agreed to acquire Coffeeheaven for £36 million, adding 79 stores in central and eastern Europe.[10]

In 2018, Whitbread faced pressure from two of its largest shareholders, activist group Elliot Advisers and hedge fund Sachem Head to sell or demerge Costa Coffee, the theory being the individual businesses would be worth much more than as one company.[11] On 25 April 2018, Whitbread announced its intention to fully demerge Costa within two years.[12] Subsequently, Coca-Cola announced a deal to acquire the chain.[5] On 3 January 2019, The Coca-Cola Company completed the acquisition of Costa Coffee for $4.9 billion from Whitbread.[13]

Products[edit]

Costa sells:

  • Hot drinks – coffees, teas and hot chocolates
  • Cold drinks – including Frostino and fruit coolers
  • Savoury snacks – including sandwiches and breakfast items
  • Cakes and pastries – including cookies, brownies and croissants
  • Reusable cups – including limited edition pride cups[14]

Costa Coffee moved its own roastery from Lambeth to Basildon, Essex, in May 2017 with an investment of £38 million, increasing the roasting capacity from 11,000 to 45,000 tons of coffee beans per year.[15]

Costa Coffee employs Gennaro Pelliccia as a coffee taster, who had his tongue insured for £10m with Lloyd's of London in 2009.[16][17]

Operations[edit]

Locations[edit]

A Costa Coffee branch in Forster Square Retail Park, Bradford

Costa Coffee operates 2,467 outlets in the United Kingdom as of October 2019. Overseas, it operates 1,412 stores in 31 countries.[1] The first Costa store outside the UK opened in the UAE in 1999[18] and, in September 2017, was the first coffee shop worldwide to start delivering coffee via drones to customers sunbathing on Dubai's beaches.[19]

Costa Express[edit]

Following Whitbread's £59.5m acquisition of Coffee Nation, a chain of coffee machines, the machines were re-branded as Costa Express.[20] The company plans to expand to target hospitals, universities and transport interchanges.[21] In Denmark, Costa Express machines are located in Shell stations. Costa Express machines were previously available in Shell locations in Canada, but have since been removed.[22] In the UK, grocery store chain SPAR has become a major operator of petrol station stores, most of which have Costa Express machines installed.[23]

World distribution[edit]

As of September 2018, Costa Coffee was available on 3 continents in 32 countries, with 3,882 total locations.[24]

Country No. of locations
United Kingdom (#1 europe) 2,467
Poland (#2 europe) 147
Ireland (#3 europe) 114
Czech Republic (#4 europe) 45
Russia (#5 europe) 35
Hungary (#6 europe) 28
Spain (#7 europe) 25
Bulgaria (#8 europe) 21
Kazakhstan (#11 asia) 12
Latvia (#9 europe) 11
Malta (#9 europe) 11
France (#11 europe) 8
Portugal (#12 europe) 5
Slovakia (#13 europe) 2
Germany (#14 europe) 1
China (#1 asia) 459
United Arab Emirates (#2 asia) 150
India (#3 asia) 57
Saudi Arabia (#4 asia) 56
Kuwait (#5 asia) 51
Qatar (#6 asia) 30
Cyprus (#7 asia) 24
Bahrain (#8 asia) 23
Oman (#9 asia) 22
Philippines (#10 asia) 16
Cambodia (#12 asia) 4
Jordan (#12 asia) 4
Indonesia (#14 asia) 1
Lebanon (#14 asia) 1
Vietnam (#14 asia) 1
Egypt (#1 africa) 44
Morocco (#2 africa) 3

Controversy[edit]

On 19 August 2019 Costa Coffee attracted media attention due to claims of unfair deductions from the pay of its employees.[25] Reports stated that current and former employees had £200 deducted from their pay for training as well as additional deductions for till discrepancies and running costs.

Claims of unfair deductions were triggered by a Twitter post suggesting that staff at a Costa store were forced to reimburse money lost to scammers who came into the store.

Trying to distance themselves from the controversy, Costa said contracts for franchise stores are managed by partners and that some staff contracts did have "clauses relating to deductions".

On 23 August additional claims appeared in the media that Costa Coffee franchise workers are "not treated like humans".[26]

The report included managers' alleged refusal to pay for sickness or annual leave, working outside of contracted hours and the retention of tips.

It cited an anonymous former employee at a store under Goldex Essex Investments Ltd who claimed they had almost £1,000 of their holiday pay deducted from their salary, despite being contracted to work 48 hours a week.

The report went on to say that baristas and employees at managerial level have complained about the numerous deductions outlined in Costa Coffee contracts written by franchise partners. A former manager is quoted as saying she had £150 deducted from her wages because she was five minutes late opening the store.

Other fines outlined in the contracts were for used uniform that was damaged when returned to the employer, excessive waste and till discrepancies.

In response to this article a Costa Coffee spokesperson said an independent audit has been launched.

Costa Book Awards[edit]

Costa Coffee has been the sponsor of the Costa Book Awards (formerly the Whitbread Book Awards) since 2006.[27]

See also[edit]

References[edit]

  1. ^ a b c d "Whitbread PLC Annual Report and Accounts 2015/16" (PDF). Archived from the original (PDF) on 14 August 2016. Retrieved 15 April 2017.
  2. ^ "Whitbread" (PDF). Archived from the original (PDF) on 30 October 2016. Retrieved 30 October 2016.
  3. ^ Team, Trefis. "Why Is Coca-Cola Paying A Hefty Premium For Costa Coffee?". Forbes. Retrieved 30 October 2018.
  4. ^ Monaghan, Angela (31 August 2018). "Whitbread sells Costa Coffee to Coca-Cola for £3.9bn – business live". The Guardian. Retrieved 31 August 2018.
  5. ^ a b "Coca-Cola to buy Costa coffee for £3.9bn". BBC News. 31 August 2018. Retrieved 13 September 2018.
  6. ^ "Costa Coffee founder: My hometown Purley has too many coffee shops". Croydon Advertiser. 16 October 2012. Archived from the original on 23 September 2015. Retrieved 15 February 2015.
  7. ^ "Costa Experience – The Journey from Bean to Cup – Costa Coffee". Costa Coffee. Retrieved 6 April 2014.
  8. ^ Sky News
  9. ^ "Costa – Our History". Whitbread. Retrieved 15 February 2015.
  10. ^ Nick Fletcher (4 March 2010). "Flat white froths up Costa Coffee's fortunes". The Guardian. Retrieved 16 September 2019.
  11. ^ "Business Sale Report – Will Costa Coffee chain be up for sale soon". business-sale.com. 22 April 2018. Retrieved 22 April 2018.
  12. ^ "Whitbread Group Structure Update" (Press release). Whitbread. 25 April 2018. Retrieved 25 April 2018.
  13. ^ https://www.just-drinks.com/news/the-coca-cola-co-completes-us49bn-costa-coffee-buy_id127474.aspx
  14. ^ "Costa Coffee launches limited edition Pride Cups". Revealing Britain. 8 July 2019.
  15. ^ "Costa Coffee Roastery, Basildon, Essex – Food Processing Technology". foodprocessing-technology.com. Retrieved 31 August 2018.
  16. ^ "Costa Coffee: The Perfect Cup". Archived from the original on 26 October 2006. Retrieved 29 October 2006.
  17. ^ "Costa Coffee taster: Ten of the weirdest insurance policies". Telegraph.co.uk. 9 March 2009.
  18. ^ Emirates, Mall of the. "Costa Coffee in Dubai Mall of the Emirates".
  19. ^ "Watch: drone delivers Costa coffee on Kite Beach in Dubai". Retrieved 31 August 2018.
  20. ^ "Growing Business Success Stories – Costa Express: Scott Martin 10 June 2011". Archived from the original on 10 September 2011.
  21. ^ Zoe Wood. "Coffee Nation – fast, fresh and £2 a cup". the Guardian.
  22. ^ "We are no longer in Canada". costacoffee.ca. Retrieved 6 December 2018.
  23. ^ "Costa Express Machine | Fresh Coffee To Go In Store - SPAR". www.spar.co.uk. Retrieved 16 October 2019.
  24. ^ "Coca-Cola just bought a massive coffee chain for $5.1 billion. Here's how it compares to Starbucks". Business Insider. 9 September 2018. Retrieved 8 May 2019.
  25. ^ "Costa Coffee: Employees call £200 deductions for training 'unfair'". BBC News. Retrieved 19 August 2019.
  26. ^ "Costa Coffee: Costa Coffee franchise workers "not treated like humans"". BBC News. Retrieved 23 August 2019.
  27. ^ Pauli, Michelle (28 November 2006). "Costa kicks off prize sponsorship with populist shortlist". the Guardian.

External links[edit]