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Costa coffee case analysis report final

2019, costa coffee management case analysis report

Costa coffee business management case analysis report 2019 was my postgraduate assignment works

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Costa Coffee: Helping consumers find their closest cup

About Costa Coffee

Founded in London in 1971, Costa Coffee is now the UK’s largest coffee store chain and the world’s second largest, with 4,000+ stores in 31 countries. Its latest digital innovation is ordering via the Costa Coffee and delivery partner apps.

Tell us your challenge. We're here to help.

About Snowdrop Solutions

A Google Cloud Premier Partner, Snowdrop Solutions delivers location intelligence for big brands.

Costa Coffee navigates consumers to their most convenient eat-in, takeaway, drive-thru, partner stores and delivery platforms.

• Ensures click-and-collect requests are made to the correct Costa Coffee store, saving time and costs by preventing mistakes
• Provides accurate information on store opening times and locations, cutting down on waiting time for consumers
• Helps store team members to prepare for demand by combining navigation tools with online ordering

Costa app helps consumers find their nearest Costa location

When you can count the number of stores you have on one hand, it’s easy to list their addresses on a website and show your consumers how to reach them. With more than 4,000 coffee stores spread across 31 countries, Costa Coffee recognized it needed a sophisticated location intelligence solution to intuitively direct its consumers to their nearest Costa Coffee and highlight which services are available where and when.

Since it was founded in 1971, technology has played a crucial role in taking Costa Coffee from a single roastery on London’s Fenchurch Street to a brand found on highstreets, grocery stores, and store cupboards in homes across the world. In 2020, when the coffee store brand wanted to ensure that its consumers were able to continue enjoying their cup of Costa Coffee amidst COVID-19 travel restrictions, the company once again turned to technology to bring new ideas and services to life.

The company wanted to make consumers aware that Costa Express machines remained operating in petrol stations and forecourts up and down the country, even when Costa Coffee stores closed. It also wanted consumers to know that their nearest store offered the facility to order and pay online (and complete a minimal contact collection), and that local stores offered delivery services via partners. Costa Coffee recognized that accurate location data was required to keep consumers informed and safe during an unusual year.

When Covid hit, the company focussed on rolling out more ways to order to more locations. Having used Google Maps Platform in its website and mobile app for years, it knew it could be the solution.

Making it as easy as possible for consumers to get what they need

When Costa Coffee launched its mobile app in 2017, it wanted to provide location intelligence features that would make its consumers’ journeys quicker and easier. When a customer imputed their location in the app, for example, it would pop up the address of their nearest store and its opening hours. But Costa Coffee wanted more. How about an interactive element that gave consumers the option to order online and show up when their order was ready for collection? These ideas would decrease waiting times, which in 2020, due to COVID-19 safety measures, was a matter of security and precaution, in addition to convenience.

To bring these ideas to life, Costa Coffee turned to its long-standing Google Cloud Premier Partner, Snowdrop Solutions . "We decided to leverage more Google Maps Platform capabilities because our developers find it easy to work with, and it supports all the functionalities we need, from routes that assist consumers to our stores to services such as click and collect," explains Gordon Lucas, Global Head of Digital Engineering at Costa Coffee.

"We decided to leverage more Google Maps Platform capabilities because our developers find it easy to work with, and it supports all the functionalities we need, from routes that assist consumers to our stores to services such as click and collect."

With a small web development team based in its UK headquarters, it was also important for Costa Coffee to be able to build in functionality that can be seamlessly rolled out across its multiple territories around the world. To that end, Costa Coffee embedded Google Maps Platform within its mobile app and international website, using the Geocoding API to create visual place markers illustrating Costa Coffee locations on its maps.

To save users time, they also leveraged Place Autocomplete to predict addresses and check their accuracy when consumers are making an online order. "The Places API powers our click-and-serve feature, where baristas bring orders to consumers’ cars. Now consumers can see how long their drive to the nearest service is," explains Lucas.

Relying on accurate location data to deliver services safely during COVID-19

When the pandemic and lockdowns forced stores to adapt in 2020, the new Google Maps Platform solutions employed by Costa Coffee online became even more invaluable for the business and its consumers. "Our Store Locator became crucial during lockdown, when opening times changed and restrictions looked different depending on where stores are based, each complying with their local lockdown measures," explains Lucas. "Having our Google Maps Platform solutions in place then meant that we were always able to show our consumers which stores or drive-thrus near them were open and safely serving great coffee during a time when, more than ever, they sought comfort in their favourite Costa Coffee beverage. That’s why our Store Locator quickly became the most visited page on our website."

"The Places API powers our click-and-serve feature, where baristas bring orders to consumers’ cars. Now consumers can see how long their drive to the nearest service is."

Although not part of the development specification, Google Maps Platform quickly became a vital part of Costa Coffee’s internal COVID-19 hygiene initiative too. While hundreds of its stores were forced to temporarily close, Costa Coffee’s 9,000 Express machines in grocery stores and petrol stations were working overtime when they were some of the few places selling cups of coffee. "Our mobile ordering system lets you find an Express machine, scan your order request, and pick up your drink without touching the screen," says Lucas.

The hands-free order-and-collect system was adapted for standalone stores too, allowing users to find and select a store, place an order, avoid queues, and pay and collect products, speeding up the transaction process and minimizing the risk of transmission between consumers and baristas.

"At the end of the first lockdown, for example, we saw huge consumption numbers on our mapping technology as people were trying to find their nearest Costa Coffee and eager to enjoy the experience of buying a coffee or snack, something that was normal pre-lockdown but had by then become a ‘treat’," says Lucas.

Location intelligence is also used to improve the experience of consumers from when they first order a cappuccino and cake, to when they arrive at a Costa Coffee store to enjoy it.

"Google Maps Platform is now a key part of our digital operations. It helps us to make our communications more relevant to consumers and boost sales by ensuring that consumers always know where and when to get their cup of Costa Coffee."

Bringing consumers around the world closer to Costa Coffee

Costa Coffee has not changed its Mocha Italia Signature Blend in 50 years, but it is continually using the latest technology to improve its distribution, accessibility, and customer service. In its latest development, it is trialling robotic coffee bars in the US, and Google Maps Platform will be integral to raising users' awareness of their whereabouts too.

"Google Maps Platform is now a key part of our digital operations. It helps us to make our communications more relevant to consumers and boost sales by ensuring that consumers always know where and when to get their cup of Costa Coffee," says Lucas. "That’s why Costa Coffee continues to innovate and experiment with Google Maps Platform to ensure that wherever our consumers are in the world, they are never far from a Costa Coffee Americano or classic Latte."

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How Coca-Cola and Costa Coffee are forging ahead with global expansion

Main image: A Costa Coffee store in Shanghai, China. Inset: (Above) Dominic Paul, CEO, Costa Coffee, (below) Jennifer Mann, President, Coca-Cola's Global Ventures Group (GVG)

Costa Coffee: British icon, global brand

"We have a long track record of disrupting the UK coffee market through different formats and channels" –  Dominic Paul, CEO, Costa Coffee

Costa's £38m UK roastery produces 45,000 tons of coffee annually and supplies the company's global portfolio. © Costa Coffee

“Coca-Cola has been very respectful of our brand and our heritage. Our operating model means that we’re connected to Coca-Cola, but not integrated within it. That’s important because we can benefit from Coca- Cola’s support, while continuing to operate as the Costa Coffee brand that customers know and love,” says Costa’s Paul. It’s a partnership that holds the potential to supercharge growth for both firms across café, vending and retail segments in international coffee markets that could otherwise prove difficult for each firm to navigate in isolation. “Costa is a good fit – and the best way – for Coca-Cola to add a global coffee platform that will complement our existing systems,” says Global Ventures Group President Jennifer Mann. “Coffee is one of the fastest-growing beverage categories in the world. It is also a category with many different elements, from vending to coffee shops to roast-and-ground to instant to pods and capsules. Today, with the growth in coffee and hot beverages, it is more important than ever that Coca-Cola makes a serious and significant investment in the category, because it’s the right thing to do to serve our consumers with more of the drinks they want.” Coca-Cola’s purchase of Costa Coffee forms part of a global trend of coffee market consolidation blurring the lines between hot beverages, soft drinks, cafés and retail. As coffee investments become increasingly lucrative, large conglomerates, such as Nestlé and JAB Holdings, are vying for supremacy across burgeoning growth categories, such as premium coffee and ready-to-drink (RTD) products. “Coffee is a big business with many formats. It’s also a very fragmented business. No single company in the world has a strong foothold across all parts of coffee. This presents a huge opportunity for Coca-Cola,” says Mann.  

Putting a price on excellence

When the Costa Coffee acquisition was announced in August 2018, analysts at Credit Suisse suggested Coca-Cola had paid too high a premium, valuing the UK coffee chain at £2.5bn ($3bn). Yet compared to the $7.1bn Nestlé paid to license Starbucks-branded retail products in 2018, Coca-Cola has not only acquired Costa’s branding rights but also the business’ substantial intellectual and material assets. These include nearly half a century of coffee knowledge, and crucially, scaled coffee self-sufficiency. Opening in 2017 after two years of construction, Costa’s £38m UK roastery produces 45,000 tons of coffee annually and is the beating heart of its global retail operations.  

"One of the strongest opportunities we see is to expand the availability of Costa Express with our customers in places around the world" –  Jennifer Mann, President of Coca-Cola's Global Ventures Group (GVG)

As Mann puts it; “Costa is an incredible British success story. The team has built a successful brand and business with proper coffee at its heart. They are experts when it comes to coffee.”  

We are only beginning to see how Coke is harnessing Costa’s significant global resources and knowledge. The deal gives the US beverage giant a strong coffee platform in more than 30 countries across Europe, Asia- Pacific, the Middle East and Africa, across which Costa already has an established retail presence. Since the 2018 acquisition Coca-Cola has already added 1,200 Costa Express self-serve machines to Costa’s pre-existing 8,000+ global portfolio.  

“One of the strongest opportunities we see is to expand the availability of Costa Express with our customers in places around the world. This is an example of bringing together the strengths of the Coca-Cola system and Costa Coffee,” says Coca-Cola’s Mann. Another high-profile development has been the launch of Costa Coffee’s hotly anticipated RTD coffee range. With Coke’s soft beverage marketing acumen and bottling infrastructure and Costa’ highly respected coffee credentials, RTD is an eloquent fusion of each firm’s expertise. “We are looking to combine the great coffee knowledge at Costa with our marketing expertise, global scale and distribution credentials,” adds Mann.  

Waking up to smell the coffee competition

Costa Coffee stores in the UK (L) and China (R). The company has over 4,000 stores and 9,000 vending machines across 32 markets. Image © Costa Coffee

Herein lies one of the biggest challenges for Coke’s global coffee strategy. Costa may be a revered global brand, yet except for a brief trial in Canada that was discontinued in 2016, the coffee chain is virtually unknown in the Americas. In the US, Costa faces an uphill struggle to garner brand recognition in a crowded market dominated by market leaders Starbucks and Dunkin’, which already hold two-thirds of the branded coffee chain market between them. German conglomerate, JAB Holdings, is also exerting significant influence in the US. Since the early 2010s JAB has amassed nearly 30 café and retail coffee brands. With a portfolio containing established businesses such as Panera Bread, Peet’s Coffee, Stumptown Coffee Roasters and Caribou Coffee, Allegra research reveals JAB is now the third-largest branded coffee chain business in the US. Combined, Starbucks, Dunkin’ and JAB control a princely 80% share of the US branded coffee shop market. Furthermore, the $18.7bn amalgamation of JAB’s soft drinks and retail coffee businesses in 2018 to create Keurig Dr Pepper is recasting coffee in the US soft drinks market. This is enabling JAB to push coffee products further and faster through Dr Pepper’s retail channels, which is now the third-largest beverage distribution company in the US behind Pepsico and Coca-Cola. For these reasons, at least in the near-term, it makes sense for Coca-Cola and Costa Coffee to focus on the latter’s strong UK and European presence , as well as growth markets in the Middle East and China, both of which represent “huge potential” according to Costa’s Paul.  

"By combining our resources and expertise we can become a world leader in coffee" –  Jennifer Mann, President of Coca-Cola's Global Ventures Group (GVC)

Allegra research shows the Middle Eastern coffee shop market grew 7.8% in 2018, with Costa Coffee the third-largest branded coffee chain and holding a 4.5% outlet share across the region. In China, Costa Coffee posted strong 2018 sales and plans to operate 1,200 stores by 2022. “We intend to grow within those markets where we already have a presence along with selective expansion into new markets,” explains Paul. While international growth across retail products and self-serve are important for Costa, Paul reiterates that brick and mortar stores will always play a core role in the Costa Coffee experience, especially in its flagship UK market. “Our store portfolio remains very important to us, as does the role we play across thousands of high streets and communities within the UK. We continue to invest in our stores and develop new formats, fit for purpose in areas such as travel locations. The growth in both RTD and our Costa Express machines means we can provide customers with convenient access to their favourite Costa, wherever they are and whatever the occasion.”

Breaking new ground

Costa Coffee's range of RTD coffee range launched in June 2019. Image © Costa Coffee

“We believe Costa Coffee is exceptionally well placed to benefit from the growing coffee trend as our brand is truly centred on coffee quality and expertise,” says Costa’s Paul. “We continue to invest in our digital platforms, delivery partnerships, new product innovation and our store environments – providing our customers with their favourite Costa product whatever the occasion.”  

The Allegra view

Combining the extensive skillsets of both firms makes sound strategic sense. Costa Coffee has the heritage, assets and expertise to deliver the expectations of increasingly sophisticated global coffee audiences, while Coca-Cola wields immense marketing firepower and global beverage distribution knowledge. Until now, both firms have had major gaps in their respective market approaches and this deal should open doors to new markets opportunities around the world. For Coca-Cola, the deal has delivered a credible coffee offer within its immense beverage portfolio, while Costa Coffee can now realise true global success beyond the UK and a handful of select international markets. Together the two entities can achieve greater opportunities across physical stores and premium vended coffee solutions, as well as the fast-growing RTD coffee segment. This looks like a commercial arrangement made in heaven – and a timely one at that. Now, with a supercharged investment and cross-channel global expansion strategy, only time will reveal the limits of what these titans can achieve together.  

From an article originally published in  Issue 2 of 5THWAVE .    Subscribe to 5THWAVE to receive each edition in print and digitally or sign up to our newsletter and be the first to read the latest articles and updates on World Coffee Portal research

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Case Analysis - Coca-Cola & Costa Coffee

• Coca-Cola Brews a Hot Acquisition: Costa Coffee

Author: Ahmed Maamoun

Online Pub Date: January 15, 2020 | Original Pub. Date: 2020

Subject: Marketing, International Marketing, International Strategic Management

Level: | Type: Indirect case | Length: 3624

Copyright: © Ahmed Maamoun 2020

Organization: Coca-Cola Company| Costa Coffee| Starbucks | Organization size: Large

Region: Northern America, Eastern Asia, Northern Europe | State:

Industry: Manufacture of beverages| Retail trade, except of motor vehicles and motorcycles

Originally Published in:

Publisher: SAGE Publications: SAGE Business Cases Originals

DOI: http://dx.doi.org/10.4135/9781529724554 | Online ISBN: 9781529724554

© Ahmed Maamoun 2020

This case was prepared for inclusion in SAGE Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes. 2021 SAGE Publications Ltd. All Rights Reserved.

The case studies on SAGE Business Cases are designed and optimized for online learning. Please refer to the online version of this case to fully experience any video, data embeds, spreadsheets, slides, or other resources that may be included.

This content may only be distributed for use within Univ of Maryland Global Campus. http://dx.doi.org/10.4135/9781529724554

SAGE © Ahmed Maamoun 2020

SAGE Business Cases

Page 2 of 10 Coca-Cola Brews a Hot Acquisition: Costa Coffee

The Coca-Cola Company, created in 1886, is the world’s largest beverage corporation, offering over 500 brands to consumers in 200 countries. The company’s revenues and profits have been dwindling over the last decade, due to the shrinking soda market, as consumers are turning away from sugary drinks, and cities are imposing soda taxes. While carbonated soft drinks (CSD) sales are declining, coffee consumption is on the rise. In August 2018, Coca-Cola decided to get a USD 5 billion shot of caffeine, and acquired the British coffeehouse Costa. The acquisition was finalized in January 2019, and now the U.S. beverage giant has access to almost 4,000 Costa stores in 32 countries. Coffee is the second most-traded global commodity after oil, and the United States is the largest coffee market in the world, with 450 million cups consumed daily. The possibilities are endless with Coke’s new global coffee platform, and the acquisition is likely to have a ripple effect for major coffee chains like Starbucks. What will transpire next?

Case Learning Outcomes

After discussion of this case, students will be able to:

• explain the importance of an ongoing growth strategy, even for the most prominent and successful multinational corporation;

• describe how mergers and acquisitions could be utilized to compete in an increasingly global and competitive market;

• highlight the significance of watching market trends and adapting accordingly; • demonstrate comprehension of the complexity of expansion decisions and the factors involved in

choosing a growth strategy; and • recognize the challenges involved in starting and running a retail operation.

The Coffee Industry

Coffee 1 was not always a mainstream global beverage, simply because it could only be grown in roughly 20 countries possessing the ideal growing conditions for coffee trees. These countries are found around the globe along the equator, also known as the “Bean Belt.” By the 19th century, trade and exchange connected coffee-producing colonies to consumers in Europe. Originally, the upper classes consumed most of the coffee, as it symbolized not only wealth and taste but also privileged access to foreign imports. Over the next century, coffee transformed from an elite delicacy to a beverage for the masses. As its popularity grew, Europe and North America increased their coffee consumption significantly. After World War II, the average U.S. consumer drank 48 gallons of coffee a year (twice the current consumption). This was soon to change as soda drinking quadrupled over the following decades, while coffee drinking declined (Olshan, 2013).

Until the 1960s, nearly all U.S. consumers purchased their coffee at supermarkets and grocery stores. During the late 1960s, some entrepreneurs established stores carrying hard-to-find gourmet food items, such as specialty coffees, aimed at wealthy customers. Some of these shops even roasted their own coffee to control the degree of roast and keep the coffee fresh. By 1969, the United States had about 50 specialty coffee stores. Throughout the 1970s, the industry experimented with roasting beans darker to make a more distinct coffee than the lighter supermarket roasts. Thus, many consumers came to associate dark roasted coffee with gourmet coffee. Decaffeinated coffees became a popular seller during the 1980s with 17% of the population drinking it by 1988 (Video 1). The market for flavored coffees emerged in the mid-1980s, causing producers to add flavors, such as cocoa, vanilla, or hazelnut in liquid or powder form, to coffee beans. Because adding flavor required some capital investment, specialty shops sold the flavored coffees at a higher price (Buzby &

Page 3 of 10 Coca-Cola Brews a Hot Acquisition: Costa Coffee

Haley, 2007).

During the early 1990s, some companies started websites to sell coffee beans over the Internet. Most industry firms became creative to increase market share. They ran catalog sales departments, added retail locations, and competed for new wholesale clients such as restaurant chains and supermarkets. Some roasters created private label blends for their institutional customers. Starbucks’s Nordstrom blend, for instance, was created for the upscale department store chain. Securing corporate accounts became increasingly important because the principal place for drinking coffee in the late 1990s was the workplace.

Watch Video 1: Moscow on the Hudson (1984)—Coffee Scene, where Robin Williams stars as a Soviet immigrant living in the United States. Checking the coffee aisle in the local supermarket became an overwhelming experience because of the broad assortment!

Two industry breakthroughs occurred in the early 2000s when coffeehouses like Starbucks and Caribou, and new technologies like Keurig pods, slowly became an integral part of the coffee culture in the United States. Starbucks Corporation began in 1971 with one store in Seattle, Washington. Three entrepreneurs—Gordon Bowker, Jerry Baldwin, and Zev Siegl—founded the business. They named it after a character from Herman Melville’s classic novel Moby Dick who was obsessed with coffee, and they developed the now iconic mermaid logo. Starbucks originally sold bulk tea and specialty coffee beans by the pound. The business’s idea for coffee bars started in 1984 from the company’s marketing director, Howard Schultz. 2 A year later, Schultz quit his job to start a chain of espresso cafes like those he had seen in Milan, Italy. He called his cafes Il Giornale, 3 and over the next 16 months, he would open seven stores throughout Seattle. All served Starbucks coffee in a style that mimicked what he had experienced in Italy. In 1987, Schultz bought Starbucks from its three founders for USD 3.8 million. By 2018, the company had 28,000 locations in 75 countries and 291,000 employees. Revenue that year was USD 24.7 billion.

In an effort to compete with Starbucks in the breakfast business, Burger King and McDonald’s introduced upgraded coffee blends, brewing procedures, and packaging. Burger King launched its BK Joe branded, made-to-order coffee program nationwide in October 2005, while McDonald’s started selling its premium coffee in 2006 (Perez, 2013).

By 2017, the retail value of the U.S. coffee market was estimated at USD 48 billion with specialty coffee comprising approximately 55% of sales, or USD 26.4 billion (National Coffee Association, 2017). The Specialty Coffee Association defines specialty coffee as “a coffee that has no defects and has a distinctive flavor in the cup.” With specialty coffee doing so well, many firms were flaunting their offerings in this category. For example, McDonald’s relaunched its McCafes with a new line of caffeine-powered drinks: Caramel Macchiato, Cappuccino, and Americano, all for a limited time for USD 2 (Diamond, 2017).

Globally, in 2017, the coffee industry was estimated at USD 60 billion, and the world’s four largest coffee exporters were Brazil (5.7 billion pounds), Vietnam (3.6 billion pounds), Colombia (1.8 billion pounds), and Indonesia (1.5 billion pounds). In fact, coffee was the world’s second most-traded commodity after oil (Smith, 2017). This growth was fueled by booming specialty coffee sales.

Coffee is arguably the most popular beverage in the world, with more than 400 billion cups consumed each year. More than 450 million cups of coffee are consumed daily in the United States. In 2018, 64% of U.S. consumers drank a cup of coffee every day, up from 62% in 2017. In absolute terms, the United States is the largest coffee market in the world; on a per capita basis, however, it’s not even in the top 10 (Smith, 2017). Interestingly, Scandinavia boasts the highest per-capita coffee consumption in the world. On average, people in Finland drink more than four cups of coffee a day. The biggest coffee drinkers are Finland (12 kg of ground coffee per capita per year), Norway (9.9 kg), Iceland (9 kg), Denmark (8.7 k), the Netherlands (8.4 kg), Sweden (8.2 kg), Switzerland (7.9 kg), Belgium (6.8 kg), Luxembourg (6.5 kg), and Canada (6.2 kg).

The Coca-Cola Company

The Coca-Cola Company, created in Georgia in 1886, is the world’s largest beverage corporation, offering over 500 brands to consumers in 200 countries. Until the 1960s, the company offered one beverage, Coke,

Page 4 of 10 Coca-Cola Brews a Hot Acquisition: Costa Coffee

and aimed it at the entire soft drink market. Today, the beverage behemoth offers hundreds of products to market segments based on diverse consumer preferences for flavors, calories, and caffeine content. Although the company has diversified its product lines, Coke remains the industry leader. A sample of the different products, brands, and flavors offered by Coca-Cola in the U.S. market is shown in Table 1.

Table 1. Coca-Cola Product Portfolio

Flavor/type Brand Name

Cola Coca-Cola (Coke)

Diet/sugar-free cola

Diet Coke/Coca-Cola Light Tab

Coca-Cola Zero Sugar

Coca-Cola Life

Caffeine-free cola Caffeine Free Coca-Cola

Cherry-flavored cola Coca-Cola Cherry

“Pepper” style Mr. Pibb

Minute Maid

Simply Orange

Royal Tru Orange

Lemon-lime Sprite

Lemon & Paeroa

Other citrus flavors

Mello Yello

Page 5 of 10 Coca-Cola Brews a Hot Acquisition: Costa Coffee

Ginger ale Seagram’s Ginger Ale

Root beer Barq’s

Cream soda Barq’s Red Creme Soda

Iced tea Gold Peak Tea

Sports drinks

Vitamin Water

Energy drinks

Full Throttle

Bottled water

Source: Coca-Cola Website (https://www.coca-colaproductfacts.com/en/products/)

In the last decade, Coke’s market share has risen from 17.3% to 17.8%, while its main rival’s, Pepsi, has dropped from 10.3% to 8.4%, according to trade publication Beverage Digest. Diet Coke and Diet Pepsi have both lost ground, but Diet Coke is still far ahead (Beverage Digest, 2019). Coke and Pepsi have fought over the past decade to win market share from one another, as overall sales dropped. As summarized in Table 2, Coca-Cola had a net revenue of USD 35.4 billion in 2018. That’s a 15% drop in revenues from the previous year. Profits suffered as well and plummeted by a whopping USD 5 billion, or 80%.

Table 2. Coca-Cola’s Rank, Revenues, and Profits (2016-2018)

Page 6 of 10 Coca-Cola Brews a Hot Acquisition: Costa Coffee

Year Rank Revenues (USD million) Profits (USD million) Assets (USD million) Employees

2018 87 35,410 1,248 87,896 61,800

2017 64 41,863 6,527 87,270 100,300

2016 62 44,294 7,351 90,093 123,200

Source: Fortune Magazine (www.fortune.com/fortune500/coca-cola/)

It’s a tough time for carbonated soft drinks (CSD) sellers. Soft drinks sales have been in decline as soda consumption is at a 32-year low. Coke and Pepsi have both posted negative yearly sales changes for the last 15 years. And there is no salvation with the use of the word “Diet.” Health experts have for years rejected the perception that diet soda is a healthy alternative. The long-term outlook is that the diet market will continue to get smaller. Today, consumers are distancing themselves not just from sugar-sweetened drinks but also from artificial sweeteners. Besides emerging consumers’ health consciousness, Coca-Cola has also been dealing with the mounting threats of city soda taxes and warning labels. San Francisco, for instance, has passed a law to add a warning label to CSD products. The label reads: “WARNING: Drinking beverages with added sugar(s) contributes to obesity, diabetes, and tooth decay. This is a message from the City and County of San Francisco” (Steinmetz, 2015). When Philadelphia levied a tax on sugary drinks and soda in 2017 (USD 0.015 per ounce tax), sales of those beverages fell by approximately 50% in the first year (Sorto, 2019). In brief, the two top players in beverages, Coke and Pepsi, battle for a shrinking market as customers are turning away from sugary drinks and empty calories, and cities are imposing soda taxes.

The Costa Acquisition

Although Coca-Cola has been in business for 130-plus years and offers hundreds of products and brands to billions of customers around the globe, the company has never had a hot drink in its product mix. This changed overnight when the U.S. cola titan announced purchasing Costa Coffee on August 31, 2018, in a surprise acquisition. Coca-Cola paid a hefty GBP 3.9 billion or USD 5.1 billion to purchase the British coffee company; a price that analysts argue was on the high side. Why was Coke willing to overpay to have instant access to a global coffee platform? It was because soda sales were down, and coffee consumption was on the rise (Mulier, 2018). Coca-Cola’s profits had dropped from almost USD 9 billion in 2013 to USD 1.2 billion in 2018, so expanding into the more profitable and promising hot beverage industry had become more of a necessity than a luxury at that point (Video 2).

Watch Video 2: The Costa Deal, which gives James Hofmann’s 4 thoughts on the Costa deal.

While U.S. consumers might not be conversant with this UK-based coffeehouse, Costa has almost 4,000 stores, and is the third largest coffee seller in the industry (behind Starbucks and McDonald’s). Costa Coffee was founded in London in 1971 by two Italian immigrant brothers, Bruno and Sergio Costa, as a wholesale operation supplying roasted coffee to caterers and specialist Italian coffee shops. In 1978, the Costa brothers opened their first coffee shop in Vauxhall Bridge Road, London. The concept was successful, and the two entrepreneurs kept adding stores across the UK. In 1995, the business was acquired by Whitbread, a British company that owns and operates hotels, for GBP 19 million when it had only 39 shops. By August 2018, Costa had 3,882 stores in 32 countries across Europe, Asia, and Africa.

The acquisition instantly provided Coca-Cola a strong coffee platform across parts of Europe, Asia Pacific, the Middle East, and Africa. By acquiring Costa, Coca-Cola adopted a new growth strategy by adding retail footprints in these parts of the world. Costa leads in the British market with almost 2,500 stores (Starbucks has 335 stores). The company is also doing relatively well in China with almost 460 stores. Although Starbucks

Page 7 of 10 Coca-Cola Brews a Hot Acquisition: Costa Coffee

is dominating the Chinese market with 3,600 stores and has plans to add an additional 2,400 outlets by 2022, the Seattle-based company cannot undermine the ramifications of competing with the largest global beverage company in such an important market. The combination of Costa’s coffee capabilities and Coca- Cola’s marketing and distribution expertise cannot be overlooked by any player in the coffee industry. Costa Coffee is the number one coffee shop brand in the UK, and has been named the nation’s favorite coffeehouse for the past nine years. Costa’s acquisition by Coca-Cola is also arguably a direct challenge to the dominance of Starbucks in the United States, even though the British coffee chain does not have a single store in the United States. It is noteworthy that the deal includes 8,000-plus fresh espresso-based vending machines, called Costa Express, which can be found in supermarkets, movie theaters, and sports venues (mostly in Europe).

The deal closed in January 2019, when European Union regulators and the Chinese government approved the acquisition. Whitbread stated it will use proceeds from the sale of the coffee business to plug a £350 m pension black hole, pay off debt, return cash to shareholders, and expand its other big brand, Premier Inn hotels. Coca-Cola did not waste any time and announced it is launching a full line of ready-to-drink (RTD) Costa products in the coming months. The global RTD tea and coffee market size is expected to reach USD 135 billion by 2024, rising at a market growth of 8.4% (Arthur, 2019). Costa cold coffee and tea cans and bottles will be available wherever Coke is sold, such as at supermarkets, discount stores, vending machines, restaurants, airports, and sporting events. Although the possibilities are endless for Coca-Cola and Costa, only time will tell if Costa is a good fit. Many stakeholders are anxious to see how the acquisition turns out.

What Else is Brewing?

Coca-Cola’s move into coffee is part of a rising trend from CSD manufacturers who are trying to find ways to thrive as consumers move away from sugary and unhealthy drinks. The situation gets worse as states and cities are contemplating imposing soda and sugar taxes. Such a move instantly places Coca-Cola in direct competition with prominent and well-established coffee sellers like Starbucks, Dunkin’ Donuts, and McDonald’s in a global market that is growing at a wild pace, in contrast with that of its conventional business. Coke’s surprise move is not that strange as many beverage companies have been undertaking acquisitions recently to join markets that seem to have better prospects. The bottom line is that the global beverage industry is diversifying into hot and cold tea and coffee, as health-conscious consumers turn away from sugary drinks to enjoy custom-made flavored waters and barista-quality coffee at home or on the go. A good example is the 2018 merger of Dr. Pepper Snapple and Keurig Green Mountain (McGrath, 2018). Also, Nestle and Starbucks have reached a USD 7.2 billion global coffee alliance, giving Nestle the ability to sell and distribute Starbucks products outside its stores worldwide. On a different front, JAB, the Luxembourg-based holding company that owns brands like Krispy Kreme and Peet’s Coffee, bought UK sandwich and coffee chain, Pret A Manger in May 2018.

Coke’s historic chief rival, Pepsi, has announced that it is purchasing the Israeli do-it-yourself carbonation company, SodaStream. The company manufactures a small appliance that carbonates water by adding carbon dioxide from a pressurized cylinder to create drinkable soda water. SodaStream has taken advantage of the growing market for seltzer beverages and has managed to grow its customer base from 4.5 million in 2012 to 12.5 million customers in 2018. Seltzers do not have sugar and are calorie-free, thereby giving consumers drinks that are healthier than traditional soda drinks. Additionally, do-it-yourself carbonated drinks can be tailored to individual tastes with different fruits and flavors added to the water. This product appeals to consumers who are considering healthier, more environmentally friendly styles of cold beverages by eliminating plastic bottles and packaging.

Coca-Cola is also tinkering with two exotic product lines, liquor and marijuana. The company is launching a new product line meant to be mixed with whisky, rum, and/or bourbon (Ritschel, 2019). And in a more unorthodox business move for Coke, the company is investigating the cannabis business. Making drinks infused with cannabidiol (CBD), the non-psychoactive chemical found in marijuana plants, is on the beverage company’s radar (Hale, 2018). Venturing into that market is not farfetched as more states continue to legalize marijuana.

While the business of fizzy soft drinks continues to struggle, Coke is meeting the challenge head on by

Page 8 of 10 Coca-Cola Brews a Hot Acquisition: Costa Coffee

exploring opportunities in coffee, liquor, and pot! The beverage war continues. What will happen next?

Discussion Questions

• 1. Why did Coca-Cola buy Costa? And why now?

• 2. Discuss the Ansoff Matrix growth strategies: market penetration, market development, product development, and diversification. Which strategy is Coca-Cola using for Costa Coffee?

• 3. Costa has zero footprint in the United States. Do you think this will change?

• 4. Coca-Cola and Pepsi have been engaged in something known as the Cola Wars for over 100 years. Do you foresee a similar battle—“Coffee Wars”—brewing between Coca-Cola and Starbucks?

• 5. Pepsi is known for mirroring Coca-Cola’s ventures globally. How do you think Pepsi will respond to the Costa acquisition?

• 6. Do you think Coca-Cola should rebrand Costa Coffee as Coke Coffee or something along those lines?

1. The word coffee comes from Kaffa, a region in Ethiopia where coffee beans may have been discovered.

2. Shultz is considering entering the U.S. 2020 presidential race as an independent.

3. Italian for “the newspaper”.

4. James Hofmann is a British coffee enthusiast and author of The World Atlas of Coffee: From Beans to Brewing -- Coffees Explored, Explained and Enjoyed.

References Arthur, R. (2019, April 24). Coca-Cola gears up for RTD Costa coffee product launch. Retrieved from https://www.beveragedaily.com/Article/2019/04/24/Coca-Cola-gears-up-for-RTD-Costa-coffee-product- launch? Beverage Digest (2019, March 1). Full-Year 2018 U.S. CSD Results at Retail. Buzby, Jean and Haley, Stephen (2007, June 1). Coffee Consumption Over the Last Century. Retrieved from https://www.ers.usda.gov/amber-waves/2007/june/coffee-consumption-over-the-last-century/ Diamond, M. (2017, September 6). McDonald’s, the Fast-Food Icon, Takes Aim at Specialty Coffee. Retrieved from http://www.app.com/story/money/business/consumer/2017/09/06/mcdonalds-coffee-cappuccino- mccafe/636793001/ Hale, K. (2018, September 27). Coca-Cola Dipping Into the Cannabis Infused Drink Market. Retrieved from https://www.forbes.com/sites/korihale/2018/09/27/coca-cola-dipping-into-the-cannabis-infused-drink- market/#60a71f5d5e0e McGrath, M. (2018, January 29). Coffee Meets Soda: Keurig And Dr Pepper Snapple Merge To Create Beverage Behemoth. Retrieved from https://www.forbes.com/sites/maggiemcgrath/2018/01/29/coffee-meets- soda-keurig-and-dr-pepper-snapple-merge-to-create-beverage-behemoth/#13187af43531 Mulier, T. (2018, August 31). Coke Makes $5.1 Billion Bet on Coffee Market With Costa Deal. Retrieved from https://www.bloomberg.com/news/articles/2018-08-31/coca-cola-to-buy-u-k-s-costa-coffee-chain- for-5-1-billion National Coffee Association (2017, March 25). Daily Coffee Consumption Up Sharply. Retrieved from http://www.ncausa.org/Portals/56/PDFs/Communication/NCA_NCDT2017.pdf?ver=2017-03-29-115235-727 Olshan, J. (2013, February 20). America’s Coffee Cup Is Half Full. Retrieved from http://www.marketwatch.com/story/americas-coffee-cup-is-half-full-2013-02-20 Perez, Marvin (2013, March 22). Coffee Consumption Increase in U.S., Association Survey Shows. Retrieved

Page 9 of 10 Coca-Cola Brews a Hot Acquisition: Costa Coffee

from http://www.bloomberg.com/news/2013-03-22/coffee-consumption-increases-in-u-s-association-survey- shows.html Ritschel, C. (2019, May 2). Coca-Cola is Launching a Version for Mixing with Liquor. Retrieved from https://www.independent.co.uk/life-style/food-and-drink/coca-cola-signature-mixers-alcohol-liquor-spirits- dark-rum-vodka-a8896876.html Smith, O. (2017, October 1). Mapped: The countries that drink the most coffee. Retrieved from https://www.telegraph.co.uk/travel/maps-and-graphics/countries-that-drink-the-most-coffee/ Sorto, G. (2019, May 15). Sugary drink sales plummeted in Philadelphia after soda tax. Retrieved from https://www.cnn.com/2019/05/15/health/philadelphia-soda-tax-sales-decrease/index.html Steinmetz, K. (2015, June 10). San Francisco Approves Warning Label for Sugary Drink Ads. Retrieved from http://time.com/3915485/san-francisco-soda-warning-label/ http://dx.doi.org/10.4135/9781529724554

Page 10 of 10 Coca-Cola Brews a Hot Acquisition: Costa Coffee

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M&a case study: coca-cola acquisition of costa coffee.

For those with an interest in the coffee industry beyond their morning latte, this M&A case study takes a look at one of the largest transactions within the global coffee industry in a very long time.

The Coca-Cola Company (“Coca-Cola”) recently announced that it has acquired Costa Limited (“Costa”), the global coffee chain founded in London in 1971.

The $US5.1b deal followed an announcement back in April by Costa’s parent company, Whitebread Plc, of its intention to demerge Costa into a new, stand-alone company. Whitebread, which is listed on the LSE and was founded way back in 1742, also owns several UK-focused restaurant and hotel brands.

Under the transaction, Coca-Cola will acquire the Costa brand together with almost 4,000 stores across 32 countries (almost 60% of which are in the UK), over 8,000 self-serve coffee vending machines and a growing in-home coffee business.

According to the Whitebread announcement, the deal values Costa at 16.4X FY2018 EBITDA. Looking at both Starbucks Corporation and Dunkin’ Brands Group Inc as broad coffee industry peers, the acquisition multiple looks broadly comparable.

Importantly, given the size disparity between Costa and Starbucks as well as Costa’s limited global presence when compared to Starbucks in particular, the multiple appears to contain a reasonable control premium. This is a sentiment echoed by Whitebread’s board in correspondence with shareholders.

M&A Case Study – Strategic Rationale

What the Costa acquisition clearly demonstrates is that coffee in all its forms and formats remains a key element of Coca-Cola’s growth strategy. Given the company’s recently sluggish share price, the need to move beyond sugary drinks and into other categories like coffee is readily apparent.

Certainly in Australia, the motivation to diversify beyond soft drinks is becoming particularly pressing with the Cancer Council recently launching a campaign directly linking obesity-causing soft drinks and multiple types of cancer.

This is certainly not a new game for Coca-Cola. The company’s Australian offshoot, Coca-Cola Amatil, has been on the hunt for coffee acquisitions in particular as far back as 2005, buying out Melbourne-based roaster Grinders. The stated goal at the time was to use the acquisition to learn about the coffee business.

With Costa, Coca-Cola is buying a well-established coffee platform that the company rightly believes is scalable beyond Costa’s traditional UK market. Given the brand’s level of penetration within its home market, overseas growth is vital.

One growth avenue highlighted in statements by Coca-Cola’s CEO James Quincey is leveraging Costa’s coffee vending machines, particularly in the US, across the country’s millions of supermarkets, convenience stores, petrol stations and the like.

This would certainly seem to be a smart move that plays to Coca-Cola’s traditional strengths in logistics and distribution and which avoids the capital intensive and high execution risk associated with trying to take on Starbucks in a direct bricks and mortar shootout.

It is also interesting to note that in its announcement, Coca-Cola specifically identified China as a key market in which Costa has a growing footprint. A recent presentation by Starbuck’s China CEO, Belinda Wong, pointed to seemingly impressive growth numbers for the company’s China business.

China is clearly on Coca-Cola’s mind with this acquisition.

However, it is worth noting that Starbucks first entered mainland China way back in 1999 . So, it’s fair to say that a Costa-Coca-Cola China push is a long-term and uncertain play, though now with a far greater chance of success with the backing of Coca-Cola.

It will be interesting to see how this acquisition plays out. What is clear is that coffee is seen by multi-national companies the size of Coca Cola as a driver of their future global growth. We at CFSG share that view and remain keenly interested in coffee both as advisors and investors through companies such as Need a Barista .

If you would to discuss how CFSG can help you grow or exit your coffee-related business, we invite you to contact us .

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Costa Coffee: NPD

Making a splash with a major new launch.

Following it’s acquisition by Coca-Cola, Costa Coffee wanted to make a splash with a major new ready-to-drink offering. They enlisted our help to create a brand relevant experience, without relying on the sights, sounds and smells of a Costa Coffee shop.

To create something truly inspired by target consumers, Costa turned to MMR for an innovation RetrEAT. We brought clients, consumers and category experts together for an interactive sensory-led co-creation workshop. The goal was to discuss all aspects of the concept and transform it into a fully aligned product, pack and brand proposition—in just two days!

The RetrEAT identified the optimal liquid formulations, packaging and communication strategies and became the basis of the brand’s first major product launch since their acquisition. With our help, Costa were able to take the product from concept to shelf in a matter of months.

Within one year, Costa Ready-to-Drink became an £8m brand, and the number three ready-to-drink coffee brand in the UK, with no signs of slowing down.

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Costa Coffee case study: prioritising people and productivity post-pandemic

As the impact and fallout of the global pandemic continues to effect the day-to-day operations of many businesses, managing and supporting your people has never been more important.

While we all want to jumpstart the economy by welcoming employees back to the workplace, employers have a huge responsibility to provide a safe, healthy, and equitable working environment.

As businesses evaluate their future working models, some may conclude that employees can continue work from home permanently.  Others who intend to reopen workplaces need a plan to do so intelligently and with sensitivity, preparing for a new normal of face masks and physical distancing.

There is mounting pressure for HR and people leaders to deliver strategically on top of baseline delivery.

Join experts from Costa Coffee and Ceridian as they discuss how technology has underpinned people strategy before and during the global pandemic, as well as how it will form part of the recovery.

This webinar will help you address the key challenges of:

• Employee wellbeing and how it impacts on productivity
• How company culture can really make a difference on retention of staff and the bottom line
• Managing a rapidly changing workforce including possible redundancies and changes to roles within the organisation
• Managing a remote workforce and how to get the best out of your people
• The challenges of getting back to the office (or not)

It provides real life examples of how Costa Coffee and Ceridian worked with the latest HCM technology to smooth the journey through the global pandemic up to today and future-proofed themselves against the challenges of the future.

Presenters:

With more than two decades in various leadership positions in HR, in high profile organizations such as easyJet, McAfee and Microsoft, Andy has demonstrable leadership expertise within high volume HR Operations and shared services from both a creation of and ongoing service delivery perspective.

In April 2019, Andy joined Costa Coffee which had just been divested from Whitbread and acquired by Coca Cola. As the UK’s largest and favourite high street coffee shop, Andy’s first assignment was to modernise and consolidate the numerous legacy HR and payroll systems within an accelerated timeframe. In March of this year, Andy’s team successfully deployed and went live with Ceridian’s Payroll and Workforce management technology, Dayforce, which has been adopted by 13,000 of Costa’s UK team members.

Wendy is responsible and accountable for the commercial and strategic growth of Ceridian Europe. Having spent most of her career working with organisations undertaking Global HCM and Payroll transformation, she has a wealth of industry experience. 

As a strong advocate for identifying value through shared insights, Wendy is cultivating a collaborative culture within Ceridian which is delivering tangible benefits to her team and customers alike. 

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Costa Coffee case study

What has an apprenticeship state of mind brought to Costa Coffee? Hint: it’s not all about baristas! In this session, our panelists delved into the transformative impact apprentices have had at Costa Coffee, hearing first-hand from leaders in the business and from apprentices themselves. Gain valuable insights into how an apprenticeship state of mind can help you bridge skills-gaps, develop new talent and impact your business growth strategies.

This panel discussion would be beneficial to business leaders, executives, managers with roles in Data, IT, AI and Analytics, with an interest in workforce development strategies. We also welcome HR, LandD professionals and talent specialists looking to explore apprenticeship programmes that can bring value to the business.

• An introduction to QA Apprenticeships and Costa Coffee from QA’s Jo Bishenden, and setting the scene for an ‘Apprenticeship State of Mind’
• Costa Coffee’s Data Prowess QA’s David Pool and Ed Child, Costa Coffee’s data connoisseur will give an insight into how Costa Coffee have enhanced their customer loyalty programme.
• Embracing Apprenticeships Jo Bishenden and Ruth South will shed light on how Costa Coffee have adopted data apprentices, embracing data-driven capabilities in-house, and the impact they’ve seen so far
• Let’s hear from our apprentices! We’ll hear some real-life stories from Costa Coffee’s data apprentices themselves

Meet the panel

Ruth South - Global Talent Development and Apprenticeships Lead (Costa Coffee): Ruth joined Costa Coffee in September 2021 and leads the Global Talent Development and Apprenticeships area. She drives Costa’s talent strategy for graduates, apprentices and early careers, creating opportunities to enable the business to grow future leaders and key capability, and has expanded the apprenticeship programmes available to Costa team members to 30 varying specialisms. 

Ed Child - Global Head Consumer Data and Digital Analytics (Costa Coffee): Ed Child is the Global Head of Consumer Data and Digital Analytics at Costa Coffee and spent over 20 years building and leading teams in the Data and Analytics space. Experience spans Ecommerce, Grocery, Finance and Retail covering a range of different data disciplines including Consumer Analytics, Loyalty, CRM, Media Effectiveness, BI, Data Science, and Digital Analytics.

David Pool - Portfolio Director Data Science and AI (QA): David is a computer scientist with specialisation in Artificial Intelligence, Machine Learning, data analytics, and business intelligence. He is a technology CEO and tech start-up founder, with a successful record of supporting business growth, corporate governance and creating thriving and successful cultures.

Jo Bishenden - Managing Director (QA): Jo is a Managing Director at QA, responsible for the Groups government-funded apprenticeships business unit which delivers a variety of tech disciplines, across numerous levels, up to degree apprenticeships, to more than 5000 learners a year.

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Costa Coffee

How did we help Costa Coffee?

We know building a productive business relies on an understanding of the finer details.

It’s about clocking the seconds spent. Spotting the bottlenecks. Counting the beans. So when the UK’s favourite coffee shop asked us to take a close look at their organisation, we were able to kick-start improvements in their efficiency.

If you’ve got 3,000 stores and 20,000 employees, how do you make sure you have the right number of people, serving the right number of customers at the right time?

It’s a question that Costa had to ask when their parent company, Whitbread, brought in a new workforce management system to deal with staff scheduling.

Until then, they’d never really stopped to look at how efficient their business is – and how they could improve. They needed to build a picture of productivity across their stores and find the opportunities behind the facts and figures. That’s where we came in.

What did we do?

Once we’d listened carefully to understand Costa’s needs, we set up camp in 15 stores for five days. As an independent company, we could integrate with the teams and dip below the surface of everyday store life.

• We used several different study methods
• We accurately timed tasks, watched and listened
• We quantified time spent serving customers
• We spent a day in the life of managers

We measured how long it took Costa’s people to complete in-store tasks, from brewing a chocolate orange mocha to cleaning sandwich grills. Then we produced average figures. These Standard Minute Values (SMVs) help companies build labour budgets so they can set sales targets, understand how many work hours they actually need, and analyse variance across their people, stores and sites.

We looked at how baristas split their time across different types of activity and grouped them into three categories; 1. Tasks that directly served customers – like making drinks and taking payments, 2. Tasks that indirectly supported customers, like cleaning or restocking, 3. Time spent not working – such as taking breaks or waiting for customers. We measured over the course of the trading day and across the whole week, using a method called Rated Activity Sampling. It illustrates the pace of work in different stores, and it’s a chance to compare benchmark percentages against other companies.

We followed in the footsteps of four store managers and three assistant managers over a seven-hour shift, to understand the split of their work responsibilities. How long did they spend serving customers and how much time did they dedicate to guiding colleagues?

We made anecdotal observations about things like layout, equipment and communication.

How did it help?

Because we’ve spent time on the client’s side, we know how important it is to be given practical next steps, to not only have in-depth data, but also clear advice on quick wins and longer-term strategy.

We gave Costa the information they needed to build an effective budget model. For the first time, they could accurately estimate how much to spend in stores to meet forecasted sales – and give customers a better experience.

We showed them how they could align their employee schedules with customer demand. We gave them new insights into their business. And we suggested actions they could take to improve performance. Here are just some of the ways we’ve helped set the wheels in motion:

We found the layout of the counters was causing bottlenecks and long queues. So Costa are trialling a new design, including a customer waiting area.

We highlighted that, in drive-through stores, food took much longer to prepare than coffee, which meant customers had to park. Now they’ve introduced a new, faster panini press. Customers no longer have to wait and baristas don’t lose time walking to the car park.

We showed that having more than one floor has a big impact on the time it takes to complete tasks. As a next step, Costa invited us back to carry out a data survey across all their UK stores. With the information we’ve given them, they can more equitably allocate salary funding and measure performance.

We reported that communication with colleagues wasn’t always consistent, so it was difficult to keep them up to speed about new offers. Following our study, Costa have ramped up the use of mobile phones and iPads to engage their people.

What our clients say

“ReThink tailored their approach to exactly match our business needs. Their work formed a vital part of our project to optimise labour across our Costa stores, and we valued how flexible they were as the project’s scope changed and developed.”

Tony Sanders, Manager at Whitbread, Costa’s parent company

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