The Coca-Cola Company is the world's biggest drinks company, controlling more than half the global market in carbonated soft drinks as well as a substantial chunk of the somewhat larger non-carbonated segment. Although its best-known lines are sparkling sodas such as Coca-Cola itself, Fanta and Sprite, the company has a vast collection of other brands. For example, the group has been involved in the iced tea and coffee sector for many years. Perhaps its most widely known brand was ready-to-drink Nestea, originally marketed by Beverage Partners Worldwide, a multinational joint venture with Nestle. However, as Coca-Cola began introducing additional tea brands of its own - one of the first was Gold Peak - the partners gradually unwound their relationship in most countries. Much of the impetus for Coca-Cola's expansion came from Japan, where the group is the long-established market leader in canned coffee and coffee-flavoured drinks, under the Georgia brand. The group also manages an extensive portfolio of tea-based drinks there. Ayataka is one of the top-selling bottled green teas in Japan, and will be instantly familiar by sight to any Western visitor, although the bottles carry no Western script. The group's other RTD tea brands include Ko Cha Ka Den, Marocha, Sokenbicha Happy and Saryusaisai. In 2008, Coca-Cola agreed a new joint venture with Illy Coffee of Italy to develop and market premium RTD coffee products under the Illy Issimo name, now distributed in more than 20 global markets. There is also a partnership with Dunkin' to introduce a range of ready-to-drink canned and bottled coffee beverages in the US, in competition with Pepsi-Starbucks' RTD coffee. Perhaps the boldest addition to-date was the acquisition in 2019 of UK-based Costa, which also gave Coca-Cola its first major foothold in the roast coffee and retail café market. In 2008, Coke agreed to acquire a 40% stake in US-based Honest Beverages, which makes premium organic bottled teas. However the company's main inhouse alternative to Nestea in the US and other non-BPW markets is Fuze, originally a "new age" fruit beverage brand acquired by Coca-Cola in 2007. In 2012, the group launched an expanded range of tea-based Fuze (or sometimes Fuse) variants in the US and 24 other non-BPW markets, mainly in Latin America and Asia. The group also markets tea-based or coffee-based RTDs in other countries, such as Imperial Orchid Tea in Singapore.
Capsule checked 13th April 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.
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