Costa Coffee

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Costa Coffee
TypeSubsidiary
IndustryCoffee shop
Founded
  • 1971; 52 years ago (1971)
  • London, England
FounderSergio Costa
HeadquartersDunstable, Bedfordshire, England
Number of locations
Increase 3,883 (2018)
Area served
Worldwide
Key people
Jill McDonald (CEO)
ProductsCoffee, tea, sandwiches, sweet snacks and iced drinks
RevenueIncrease £1.168 billion (2016)[1]
Increase £153 million (2016)[1]
ParentThe Coca-Cola Company

Costa Coffee is a British coffeehouse chain with headquarters in Dunstable, England.

Costa Coffee was founded in London in 1971 by Sergio Costa as a wholesale operation supplying roasted coffee to caterers and specialist Italian coffee shops. It was acquired by Whitbread in 1995, 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, including 460 in China.[1][2]

Coca-Cola acquired Costa from parent company Whitbread PLC for US$5.1 billion on 3 January 2019, providing a coffee platform across parts of Europe, Asia Pacific, the Middle East, and Africa.[3]

Costa is the second largest coffeehouse chain in the world, and the largest in the UK.[4][5]

History

Signage outside a branch in Cromer

Sergio Costa founded a coffee roastery in Fenchurch Street, London, in 1971, supplying local caterers. The family had moved to England from Parma, Italy, in the 1950s.[6][7] Costa branched out to selling coffee and opened their first store in Vauxhall Bridge Road, London in 1981.[8]

By 1995, the Costa Coffee 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 the Polish chain Coffeeheaven for £36 million, adding 79 stores in central and eastern Europe.[10]

The company's products (such as its coffee and drinks) were sold in Brewers Fayre and Beefeater until it was subsequently purchased by the Coca-Cola Company from Whitbread.

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

In November 2019, Dominic Paul was succeeded as CEO of the company by Jill McDonald.[14] In March 2020, all UK coffee shops were closed indefinitely due to the COVID-19 pandemic. In late May some branches reopened for takeaway or drive-through orders.[15] In 2022, Costa Coffee discontinued the Costa Book Awards that Whitbread had started 51 years earlier.[16]

Products

An espresso served at Queen Elizabeth Hospital Birmingham.

Costa branches sell hot and cold drinks, sandwiches, cakes and pastries, and snacks. In 2020, the brand collaborated with three chocolate brands (Quality Street, After Eight and Terry's) for some of their limited-edition Christmas drinks.[17]

Costa moved its roastery from Lambeth to Basildon, Essex, in May 2017 with an investment of £38 million, increasing their annual coffee-roasting capacity from 11,000 to 45,000 tonnes.[18]

In 2020, Costa Coffee canned coffee was introduced.[citation needed]

Costa Coffee employs Gennaro Pelliccia as a coffee taster, who had his tongue insured for £10m with Lloyd's of London in 2009.[19][20]

Operations

Locations

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 1,413 stores in 32 countries.[1] The first Costa store outside the UK opened in the United Arab Emirates in 1999,[21] and, in September 2017, was the first coffee shop worldwide to start delivering coffee via drones.[22]

Costa Coffee's Bedfordshire headquarters are next to those of Whitbread.

Costa Express

Following Whitbread's £59.5m acquisition of Coffee Nation, a chain of coffee machines, the machines were re-branded as Costa Express.[23] The company planned to expand to hospitals, universities and transport interchanges.[24] In Denmark, Costa Express machines are located in Shell stations; they had previously also been in Shell Canada.[25] In the UK, many grocery store chain SPAR petrol station stores have Costa Express machines.[26]

World distribution

Costa Coffee in Warsaw, Poland

As of January 2022, Costa Coffee was available on 4 continents in 38 countries, with 3,884 total locations.[27]

Country No. of locations
 United Kingdom 2,467
 China 459
 United Arab Emirates 150
 Poland 147
 Ireland 114
 Kuwait 95[28]
 Czech Republic 58
 India 57
 Saudi Arabia 56
 Egypt 44
 Russia 36
 Spain 27
 Cyprus 24
 Bahrain 23
 Oman 22
 Bulgaria 21
 Philippines 16
 Kazakhstan 12
 Latvia 11
 Malta 11
 France 8
 Croatia 7
 Malaysia 7
 South Africa 6
 Portugal 5
 Turkey 4
 Cambodia 4
 Jordan 4
 Germany 3
 Morocco 3
 United States 2
 Hungary 1[29]
 Qatar 1
 Indonesia 1
 Lebanon 1
 Vietnam 1
 Greece 1
 Mexico 1
 Georgia 1[30]

Controversies

On 19 August 2019, Costa Coffee attracted media attention due to claims of unfair deductions from the pay of its employees.[31] Reports stated that current and former employees had £200 deducted from their pay for training, as well as additional deductions being levied 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 were managed by franchisees, and that some staff contracts did have "clauses relating to deductions".

Only four days later, additional claims appeared in the media that Costa Coffee franchise workers were "not treated like humans".[32] The report included managers' alleged refusal to pay for sickness, annual leave, or working outside contracted hours, and retaining tips. It cited an anonymous former employee at a store under Goldex Essex Investments Ltd who claimed that almost £1,000 of their holiday pay was deducted from their salary, despite being contracted to work 48 hours a week. The report said that baristas and employees at managerial level had complained about the numerous deductions outlined in Costa Coffee franchisees' contracts. A former manager was quoted as saying she had £150 deducted from her wages after having been five minutes late opening the store. Other fines outlined in the contracts were for uniform that were damaged when returned to the employer, excessive waste and till discrepancies. A Costa Coffee spokesperson responded that an independent audit had been launched.[needs update]

Costa Book Awards

Main article: Costa Book Awards

Costa Coffee has been the sponsor of the Costa Book Awards (formerly the Whitbread Book Awards) since 2006. On 10 June 2022 they announced this would end.[33]

See also

References

  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. ^ "Coca-Cola to buy Costa coffee for £3.9bn". BBC News. 31 August 2018. Retrieved 13 September 2018.
  6. ^ "Sergio Costa Obituary - Italian-born entrepreneur who opened a cafe in London in the seventies and built up one of Britain's most popular coffee chains". The Times. London. Archived from the original on 14 April 2022. Retrieved 12 April 2022.
  7. ^ "Costa Experience – The Journey from Bean to Cup – Costa Coffee". Costa Coffee. Retrieved 6 April 2014.
  8. ^ "Our history | Behind the beans | Costa Coffee".
  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. ^ St Cartmail, Chris (22 April 2018). "Business Sale Report – Will Costa Coffee chain be up for sale soon". business-sale.com. Archived from the original on 23 April 2018. Retrieved 22 April 2018.
  12. ^ "Whitbread Group Structure Update" (Press release). Whitbread. 25 April 2018. Retrieved 25 April 2018.
  13. ^ "The Coca-Cola Co completes US$4.9bn Costa Coffee buy". just-drinks.com. 3 January 2019.
  14. ^ "Costa Coffee names former McDonald's UK chief as CEO". Reuters. 20 November 2019. Retrieved 8 January 2020.
  15. ^ "Costa Coffee re-open first branch in Milton Keynes for take-away". MKFM. 19 May 2020. Retrieved 30 May 2020.
  16. ^ "Costa book awards scrapped suddenly after 50 years". TheGuardian.com. 10 June 2022.
  17. ^ "Costa Coffee reveals its best ever limited edition Christmas drinks menu".{{cite web}}: CS1 maint: url-status (link)
  18. ^ "Costa Coffee Roastery, Basildon, Essex – Food Processing Technology". foodprocessing-technology.com. Retrieved 31 August 2018.
  19. ^ "Costa Coffee: The Perfect Cup". Archived from the original on 26 October 2006. Retrieved 29 October 2006.
  20. ^ "Costa Coffee taster: Ten of the weirdest insurance policies". Telegraph.co.uk. 9 March 2009. Archived from the original on 12 January 2022.
  21. ^ Emirates, Mall of the. "Costa Coffee in Dubai Mall of the Emirates".
  22. ^ "Watch: drone delivers Costa coffee on Kite Beach in Dubai". 25 September 2017. Retrieved 31 August 2018.
  23. ^ "Growing Business Success Stories – Costa Express: Scott Martin 10 June 2011". Archived from the original on 10 September 2011.
  24. ^ Zoe Wood (2 March 2011). "Coffee Nation – fast, fresh and £2 a cup". The Guardian.
  25. ^ "We are no longer in Canada". costacoffee.ca. Retrieved 6 December 2018.
  26. ^ "Costa Express Machine | Fresh Coffee To Go In Store - SPAR". spar.co.uk. Retrieved 16 October 2019.
  27. ^ "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.
  28. ^ "Costa Coffee Kuwait". Alghanim Industries. Retrieved 14 August 2022.
  29. ^ "Bezár a Costa Coffee Magyarországon". telex (in Hungarian). 24 July 2021. Retrieved 24 July 2021.
  30. ^ "Costa Coffee Opened in Georgia". Facebook. 18 October 2022. Retrieved 18 October 2022.
  31. ^ "Costa Coffee: Employees call £200 deductions for training 'unfair'". BBC News. 19 August 2019. Retrieved 19 August 2019.
  32. ^ "Costa Coffee: Costa Coffee franchise workers "not treated like humans"". BBC News. 23 August 2019. Retrieved 23 August 2019.
  33. ^ Pauli, Michelle (28 November 2006). "Costa kicks off prize sponsorship with populist shortlist". The Guardian.

External links

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