Costa Coffee

Costa Limited

Type	Subsidiary
Industry	Coffee shop
Founded	1971; 50 years ago (1971) London, England
Founder	Bruno Costa Sergio Costa
Headquarters	Dunstable, England
Number of locations	3,883 (2018)
Area served	Worldwide
Key people	Jill McDonald (CEO)
Products	Coffee, tea, sandwiches, sweet snacks and iced drinks
Revenue	£1.168 billion (2016)[1]
Net income	£153 million (2016)[1]
Parent	The Coca-Cola Company (2019–present)
Website	www.costa.co.uk

Costa Coffee is a British coffeehouse chain and a subsidiary of The Coca-Cola Company. It is headquartered in Dunstable, England.

Costa Coffee was founded in London in 1971 by brothers Bruno and Sergio Costa as a wholesale operation supplying roasted coffee to caterers and specialist Italian coffee shops. Acquired by Whitbread in 1995, it was 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, with 460 in China alone.^[1][2]

Coca-Cola announced its intention of acquiring Costa from parent company Whitbread PLC for $5.1 billion. The deal, which closed on 3 January 2019, gave Coca-Cola a strong 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

Brothers Bruno and Sergio Costa founded a coffee roastery in Lambeth, London, in 1971, supplying local caterers. The family had moved to England from Parma, Italy, in the 1960s.^[6][7] Costa branched out to selling coffee in 1978, when its first store opened in Vauxhall Bridge Road, London.

In 1985, Sergio bought out Bruno's share of the company. Bruno went on to found a tableware company.^[8] By 1995, the 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]

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 as one company.^[11] On 25 April 2018, Whitbread announced its intention to fully demerge Costa within two years.^[12] Subsequently, Coca-Cola announced a deal to acquire the chain.^[5] On 3 January 2019, The Coca-Cola Company completed the acquisition of Costa Coffee for $4.9 billion from Whitbread.^[13]

On 20 November 2019, Costa Coffee announced that Dominic Paul would step down as CEO of the company, to be succeeded by Jill McDonald.^[14]

In March 2020, all UK coffee shops were forced to close indefinitely due to nationwide lockdown rules introduced by the government with the aim to slow the spread of COVID-19. In late May, a select few branches reopened for takeaway only, while many more branches opened for drive-through orders.^[15]

Products[]

An espresso served at Queen Elizabeth Hospital Birmingham.

Strawberry lemonade

Costa sells:

• Hot drinks – coffees, teas and hot chocolates
• Cold drinks – including Frostino, flavoured lemonades and fruit coolers
• Savoury snacks – including sandwiches and breakfast items
• Sweet snacks - including chocolate bars and wafers
• Cakes and pastries – including cookies, brownies and croissants
• Reusable cups – including limited edition pride cups^[16]

The brand offers seasonal menus which include both drinks and snacks. Costa also has festive takeaway cups with limited-edition designs each year. 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 own roastery from Lambeth to Basildon, Essex, in May 2017 with an investment of £38 million, increasing their roasting capacity from 11,000 to 45,000 tonnes of coffee beans per year.^[18]

In 2020, Coca-Cola launched Costa Coffee canned coffee. The canned coffee is sold in several stores including Sainsbury's and Asda, as a chilled drink, and claims to have 30% less sugar than other chilled coffees.

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 to customers sunbathing on Dubai's beaches.^[22]

Costa Coffee's Bedfordshire headquarters are next to that of Whitbread, and also next to the NICEIC trade organisation, north of the Dunstable industrial area.

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 plans to expand to target hospitals, universities and transport interchanges.^[24] In Denmark, Costa Express machines are located in Shell stations. Costa Express machines were previously available in Shell locations in Canada, but have since been removed.^[25] In the UK, grocery store chain SPAR has become a major operator of petrol station stores, most of which have Costa Express machines installed.^[26]

World distribution[]

Costa Coffee in Warsaw, Poland

As of September 2018, Costa Coffee was available on 3 continents in 32 countries, with 3,883 total locations.^[27]

Country	No. of locations
United Kingdom	2,467
Poland	147
Ireland	114
Czech Republic	58
Russia	35
Hungary	1[28]
Spain	25
Bulgaria	21
Latvia	11
Malta	11
France	8
Portugal	5
Germany	1
China	459
United Arab Emirates	150
India	57
Saudi Arabia	56
Kuwait	95[29]
Qatar	30
Cyprus	24
Bahrain	23
Oman	22
Philippines	16
Kazakhstan	12
Malaysia	7
Cambodia	4
Jordan	4
Indonesia	1
Lebanon	1
Vietnam	1
Thailand	1
Egypt	44
Morocco	3

Controversies[]

On 19 August 2019, Costa Coffee attracted media attention due to claims of unfair deductions from the pay of its employees.^[30] 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 are managed by partners, and that some staff contracts did have "clauses relating to deductions".

On 23 August, additional claims appeared in the media that Costa Coffee franchise workers were "not treated like humans".^[31] The report included managers' alleged refusal to pay for sickness or annual leave, working outside of contracted hours and the retention of 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 went on to say that baristas and employees at managerial level have complained about the numerous deductions outlined in Costa Coffee contracts written by franchise partners. 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 used uniform that was damaged when returned to the employer, excessive waste and till discrepancies. In response to the article, a Costa Coffee spokesperson said an independent audit had been launched.^{[needs update]}

Costa Book Awards[]

Costa Coffee has been the sponsor of the Costa Book Awards (formerly the Whitbread Book Awards) since 2006.^[32]

See also[]

• List of coffeehouse chains

References[]

External links[]

• Media related to Costa Coffee at Wikimedia Commons
• Official website