Daily Management Review

Will Coca-Cola create competitor for Starbucks?


04/30/2019


At the beginning of the year, Coca-Cola completed acquisition of Costa Coffee for $ 5 billion. This British company is the second largest chain of coffee shops after Starbucks. Meanwhile, Coca-Cola CEO James Quincey is trying to increase the company's influence in the highly profitable coffee industry.



Mike Mozart
Mike Mozart
During a teleconference devoted to the company's financial activities in the first quarter, Quincey revealed some of the details of the company's plan to gain market share in the new industry. First, Coca-Cola will launch a production of a new coffee drink in another 25 countries. In addition, the company plans to begin producing ready-to-drink coffee products under the Costa brand, but it is not yet clear in which countries.

Quincey reported that new caffeine-rich drinks are created for people who want to “recharge” with energy in certain cases, for example, in the middle of the working day. If Coca-Cola really succeeds in adding coffee to the drink, preserving the signature taste and avoiding sugar, the new product will certainly become popular.

This is a really smart move. “Customers will have the opportunity to choose between traditional Coca-Cola and the same drink, but with caffeine. In addition, the company will be able to attract new customers who value the special qualities of coffee,” explains Quincey.

However, there are also disadvantages - people may start giving more preference to the coffee “cola”, while popularity of the company's traditional drink will start to decline.

Quincey does not hide the fact that he turned Coca-Cola into a company that exclusively engaged in the production of beverages. This includes not only new soda with coffee content, but also ready-to-drink Costa coffee products, as well as sports drinks.

Recall that about a year ago, Coca-Cola acquired a minority stake in the BodyArmor company, which produces drinks of the same name for athletes.

Such a desire to grow should encourage investors, especially in the lucrative coffee industry. On the other hand, it can become a serious concern for Starbucks, especially given the problems of the company with the reduction in the number of visitors to coffee shops in the afternoon. The more people will prefer the coffee "cola", the less will be the demand for Starbucks cold drinks.

source: news.yahoo.com






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