Can Costa Coffee Capture U.S. Market Share?

Costa Coffee, a global coffee chain with over 2,800 stores in the U.K. and Ireland, is now entering the U.S. market. The 53-year-old chain has opened six coffee shops in Atlanta and one in the Seattle-Tacoma International Airport to build awareness and get the brand in front of customers. The main goal is to dominate the B2B world and be the premium coffee served at away-from-home occasions like hospitality, workplaces, convenience stores, and travel locations, largely through its innovative technology, including its Smart Cafe vending machine.

Costa Coffee was founded by Italian brothers Sergio and Bruno Costa in 1971 and has since grown from there, opening their first store in London in 1981. In 2019, Coca-Cola acquired Costa for $4.9 billion, but the world closed down with the arrival of COVID, leaving the coffee shop clientele dwindling. Since then, Coca-Cola has upped its game in the coffee realm, hiring Philippe Schaillee as the global CEO of Costa.

Costa opened its first U.S. coffee shop in Atlanta in 2022 and now has five in that city, plus a sixth in Seattle. The most recent Atlanta location opened in October. Erica Brown, managing director of Americas, says Atlanta is a perfect city for building brand experience and awareness because it’s a creative city and cultural hub. Airports are also a great spot to learn about consumer behavior, as they have people coming from all over the world.

Costa’s focus in the U.S. is B2B, where people have a real opportunity to engage with the brand. It is opening Smart Cafes at a rapid clip, with 250 open in the U.S. (more than 16,000 globally). These give Costa a 24/7 opportunity to serve customers and due to their small footprint, can fit in many locations.

The Smart Cafe is an automated touch screen machine that produces drinks in around a minute and a half. From a three-foot by three-foot footprint, it can create more than 200 “barista quality” drink combinations, including a cortado, a cappuccino, and a flat white. Coca-Cola already has extensive experience in vending machines through its Freestyle fountain machines, which launched in 2009 and can offer an array of beverages. Both the Freestyle and the Smart Cafe are internet-connected machines that can report back to Coca-Cola, refining and optimizing offerings to understand consumer behavior and choice.

Costa plans to provide beans and equipment to other channels where coffee is served, including the launch of Podio, a coffee pod system for B2B channels.

Read More @ QSR

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