US beverage giant Coca-Cola has cited a steady performance for Costa Coffee in the UK and China as driving coffee segment growth in its first quarter, amid company-wide sales of $11bn
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US beverage giant Coca-Cola acquired Costa Coffee for $5.4bn in 2018 | Photo credit: Costa Coffee
Atlanta-based Coca-Cola has reported a strong performance for Costa Coffee in its first quarter, led by increased sales in the UK and China.
The US beverage giant acquired Costa Coffee for $5.4bn in 2018 and has regularly cited the coffee chain’s post-pandemic recovery as a key contributor to its revenues.
Coca-Cola said its coffee unit volume grew 9% in the three months ended 31 March 2023, primarily driven by Costa Coffee’s trading in the UK and China.
Costa Coffee is the UK’s largest coffee chain and currently operates 2,700 stores and more than 12,800 Costa Express coffee machines across the country.
The coffee chain has approximately 440 outlets in China and launched its first drive-thru store pilot in the country at the Waigaoqiao Free Trade Zone in December 2022.
Costa Coffee is also expanding its bricks-and-mortar presence in the US, opening its fourth store, and its third in Coca-Cola's home state of Atlanta, earlier this year. The coffee chain made its US debut with an outlet in the CODA mixed-use development unit in August 2022.
Founded in 1971, Costa Coffee operates more than 1,100 stores globally and has scaled impressively in the last 12 months, increasing its presence in India and the Middle East, returning to Morocco and opening its first stores in Georgia, Austria and Pakistan.
The coffee chain is also set to open its first stores in Japan and Azerbaijan this year.
Coca-Cola's total first quarter revenues grew 5% to $11bn, driven predominantly by higher prices.
“We are encouraged by our first quarter 2023 results. We have the right portfolio, the right strategy and the right execution to deliver in the marketplace. We are confident in our ability to deliver on our 2023 objectives,” said James Quincey, Chairman and CEO of The Coca-Cola Company.
The beverage giant expects to deliver organic revenue growth of 7% for full-year 2023.
In February 2023, Coca-Cola reported full-year 2022 revenue growth of 11% to reach $43bn. Sales in the company’s coffee segment grew 13% over the 12-month period.