Whitbread has undergone a mammoth transformation since 1998. That year the company was the UK's biggest pub landlord and among its best-known brewers. Over the next few years, however, as a result of a series of acquisitions and disposals, the group overhauled its entire portfolio and reinvented itself as the UK's #1 budget hotel and leisure operator under what is now the Premier Inn brand. Virtually all of the other businesses Whitbread controlled in 1998 have now been sold. With 820 sites and 78,500 rooms, Premier Inn is the local market leader in the budget hotel segment. Whitbread originally established Travel Inn in 1987 as part of its pubs division; it acquired Premier Lodge in 2004 and merged the two brands (initially as Premier Travel Inn). Premier Inn has begun to establish a presence in selected international markets as well, with 16 hotels in Germany, including local chain Foremost acquired in 2020, and two in the Middle East. Premier Inn hotels don't traditionally offer their own inhouse catering facilities, but most are now situated alongside one of the group's heritage restaurant chains, which include long-established Beefeater Grill and Brewers Fayre eateries, and more recently launched Bar & Block, Cookhouse and Table Table bar and pub restaurants. A large number of freestanding pub restaurants were sold in 2006 to Mitchells & Butlers. Whitbread now operates around 450 restaurants altogether. Alison Brittain succeeded Andy Harrison as group chief executive in 2016. Revenues for the year ending May 2020 were £2.1bn, with net profit of £218m. Almost all of the company's hotels closed temporarily in March 2020 because of the Cornavirus crisis, though a handful of UK outlets remained open for NHS workers. Its German hotels began to reopen in May 2020. Numerous other businesses have been sold since the 1990s. Whitbread was originally one of the country's biggest brewers, founded by Samuel Whitbread in the 18th century. The brewery moved into the hospitality industry in the 1980s with various hotel and restaurant acquisitions, as well as health & fitness operator David Lloyd Leisure. The brewery division was sold in 2000 to what is now AB InBev, followed by the heritage pub business in 2001, and then most of what had become a large restaurant division that also included TGI Fridays and Pizza Hut UK. Fitness chain David Lloyd Leisure was sold in 2017. The last of Whitbread's pillar businesses was leading UK coffee chain Costa. That was sold in 2018 to Coca-Cola.
Capsule checked 8th June 2020
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Adbrands Weekly Update 6th Sep 2018: There's a surprising new entrant in the global coffee retail business: Coca-Cola. In a deal that few observers had expected, Coke announced the acquisition of Costa Coffee, the world's third largest coffee retail business overall after Starbucks and McDonald's, but #1 in Europe. At $5.1bn, it will be Coke's biggest ever purchase, and its first move into direct-to-consumer retail. It is also a clear attempt to fend off potential competition from Europe-based investment group JAB Holding, which not only owns the world's most diversified packaged coffee business as well as several retail coffee bar and sandwich chains, but recently completed the takeover of Coke's soft drinks competitor Dr Pepper Snapple Group. Another rival Nestle owns not only the giant Nescafe and Nespresso coffee brands - and now the packaged Starbucks coffee brand as well - but is also a major competitor in soft drinks, primarily through its global bottled water operations. There are several key advantages to the Costa deal: that brand is already the biggest coffee bar chain in the EMEA region, slightly ahead of Starbucks by outlets. It also has an extensive global network of standalone self-serve vending machines located in service stations and grocery stores. In addition, said Coke CEO James Quincey, the deal provides an entry into the hot beverages sector. "Coffee is one of the fastest-growing beverage categories in the world," he told analysts. "It's also a category with many different elements, from vending to coffee shops to roast-and-ground to instant to pods and capsules. Costa is a platform with a great supply chain in coffee, a world-class roastery, a strong retail presence and a vending system... It also has potential for expansion into ready-to-drink coffee across many markets globally." The business is being acquired from hospitality group Whitbread, which had previously announced plans to spin off Costa as a separate company. Following completion, Whitbread's biggest remaining asset will be the budget hotel chain Premier Inn. Analysts predict that a takeover bid could follow from a larger hotel operator, such as InterContinental or Hilton.
Adbrands Weekly Update 26th Apr 2018: UK hospitality group Whitbread announced plans to spin off its Costa Coffee chain - the UK's biggest, ahead of Starbucks - as a separate public company within the next two years. The decision follows increasing pressure from activist investors to split Costa from Whitbread's Premier Inn hotel chain and restaurants. For the year to March 2018, group revenues were £3.3bn, with just £2.0bn from hotels and restaurants and £1.3bn from Costa.
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