--- title: "Coca-Cola Joins Forces with Costa to Battle Nestlé and Starbucks in China's Ready-to-Drink Coffee Market" description: "Coca-Cola has launched its first ready-to-drink coffee product under the Costa brand, acquired for $34.7 billion, featuring three low-sugar variants. The company aims to leverage Costa's expertise and expand in China, where it plans to triple Costa's stores to 1,200, intensifying competition with Starbucks." author: "New Distribution" publisher: "New Distribution" email: "zhaobo258@gmail.com" telephone: "+8615854817671" published: "2019-06-15" language: "en" canonical: "https://xinjignxiao.com/en/articles/coca-cola-joins-forces-with-costa-to-battle-nestle-and-starbucks-in-chin-39d3c242/" markdown: "https://xinjignxiao.com/en/articles/coca-cola-joins-forces-with-costa-to-battle-nestle-and-starbucks-in-chin-39d3c242.md" original_source: "https://mp.weixin.qq.com/s/9htDoZEGDi_WhOTLYzBp7Q" translation: "https://xinjignxiao.com/zh/articles/%E9%9B%80%E5%B7%A2-%E6%98%9F%E5%B7%B4%E5%85%8B%E7%9A%84%E5%8A%B2%E6%95%8C-%E5%8F%AF%E5%8F%A3%E5%8F%AF%E4%B9%90%E8%81%94%E6%89%8Bcosta%E4%BA%89%E6%88%98%E4%B8%AD%E5%9B%BD%E5%8D%B3%E9%A5%AE%E5%92%96%E5%95%A1%E5%B8%82%E5%9C%BA-39d3c242.md" attribution: "New Distribution — https://xinjignxiao.com/en/articles/coca-cola-joins-forces-with-costa-to-battle-nestle-and-starbucks-in-chin-39d3c242/" usage_policy: "https://xinjignxiao.com/ai-policy.txt" --- # Coca-Cola Joins Forces with Costa to Battle Nestlé and Starbucks in China's Ready-to-Drink Coffee Market > Coca-Cola has launched its first ready-to-drink coffee product under the Costa brand, acquired for $34.7 billion, featuring three low-sugar variants. The company aims to leverage Costa's expertise and expand in China, where it plans to triple Costa's stores to 1,200, intensifying competition with Starbucks. Click to read the original article for details. **A new player joins the ready-to-drink coffee segment** After acquiring Costa, the world's second-largest coffee chain (a true "number two" compared to some domestic competitors of Starbucks), for $34.7 billion, Coca-Cola has finally launched its first product after nearly a year: Costa Coffee ready-to-drink. New Distribution has learned that the range includes three products: Classic Latte (espresso, cream, and milk), Caramel Latte (espresso, milk, and caramel syrup), and Americano (espresso and water), all brewed with the same Mocha Italia Signature Blend beans used in Costa stores. The main selling point is low sugar—each 250ml serving contains only 15-180 calories, about 30% less sugar than most current ready-to-drink coffees. The products will launch later this month in the UK, Poland, and China. **Coca-Cola believes that Costa has strong brand influence and a consumer base in these countries, and the new products will "further drive Costa Coffee to become a leader in the global coffee business."** Regarding the launch, Jennifer Mann, Senior Vice President at Coca-Cola, said: "This demonstrates the power of our partnership. It combines the marketing expertise, global scale, and distribution system of the Coca-Cola system with Costa Coffee's expertise and capabilities in coffee." In fact, as early as 2006, Coca-Cola had launched a coffee product under its own name (Coca Cola Coffee), but it was discontinued two years later due to market immaturity. However, this time launching Costa Coffee is driven by trust in the leading Costa brand. **Costa provides Coca-Cola with strong expertise across the entire coffee supply chain, including sourcing, vending, and distribution channels, which will complement the existing capabilities of the Coca-Cola system.** Some analysts believe that Coca-Cola's acquisition of Costa Coffee is aimed at competing with Starbucks, and the future competition between the two companies will focus on the mainland China market. Costa Coffee plans to expand its stores in China to 1,200, three times the current number, while Starbucks has also stated that China will be a key focus for its development over the next decade. **Is Coca-Cola still the leader in beverages?** Coca-Cola's CFO, Murphy, noted, "Over the past few years, Coca-Cola's beverage portfolio has continued to diversify." Perhaps surprising to many, Coca-Cola has already become the "leader" in many beverage segments. **According to related media reports, besides carbonated soft drinks, Coca-Cola ranks first in three other segments: juices, dairy and plant-based beverages; water and sports drinks; and tea and coffee. Additionally, through its partnership with Monster, Coca-Cola holds the second position in the energy drink category.** So, you don't need to worry about Coca-Cola's declining performance over the years. In terms of industry status, apart from cola, no one dares to claim the top spot. The fundamental reason Coca-Cola is so strong is its partnerships with bottlers worldwide. This allows them to quickly open markets globally. According to CFO Murphy, the company now has over 225 bottling partners worldwide, operates in more than 20 channels, and distributes products to over 28 million customer outlets. Coca-Cola's internal "lift-shift-scale" model is a secret weapon. Since Coca-Cola operates in over 200 countries, these diverse markets act like many laboratories, allowing the company to summarize experiences from different markets and then roll them out in others, achieving efficient learning and transformation. This is a capital for experimentation and trial that many FMCG companies do not have. **Can Coca-Cola rest easy in the future?** As is well known, Coca-Cola's core carbonated soft drink business has been declining for several years. The "2018 Accenture China Consumer Insights" points out that healthy consumption is one of the five major trends under the new consumption wave. Many consumer reports also mention that Chinese post-90s generation has a high awareness of health, as seen in their use of insulated cups, whole-grain bread, and fresh juice, reflecting a focus on health. Therefore, Coca-Cola cannot resist the decline of carbonated drinks in the future. Besides that, what other challenges might Coca-Cola face in the beverage market? The global beverage industry is a massive $1.5 trillion market and may continue to grow. Experts say that in developed markets, Coca-Cola holds a 21% share in cold beverages but only 1% in hot beverages; in emerging markets, its share is 11% in cold beverages and only 0.3% in hot beverages. The left chart shows developed markets, the right chart shows emerging markets. From this, it is clear that Coca-Cola needs to make strides in the hot beverage market. The recent launch of Costa Coffee may be an important step for Coca-Cola to compete in the hot beverage market. After nearly 140 years of leading the beverage industry, Coca-Cola continues to set trends. After building a vast business empire with carbonated drinks, it now seeks to shape its new identity with new products or categories. For example, the recently popular hydrogen running shoes on Tmall feature a "pull-tab" design on the tongue; pulling it feels like opening a Coke can—a clever touch. With the prominent and familiar logo, Coca-Cola's cross-industry capabilities are growing. Besides running shoes, Coca-Cola has also made interesting attempts in cosmetics, clothing, and accessories. Coca-Cola is constantly pushing boundaries and seeking unlimited growth. With this move into Costa Coffee, can Coca-Cola successfully enter the ready-to-drink coffee market? Let's wait and see! This article is compiled by from Food Headlines and Xiaoshidai. --- ## Copyright and AI use This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL. Contact: zhaobo258@gmail.com · +86 158 5481 7671