Coca-Cola spends $5.1 billion into the coffee industry! Starbucks is really in a hurry!

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In this world, there is no immutable industry, let alone an enduring giant!

At present, the pattern of the coffee market is undergoing great changes in the fierce competition.

British hotel and catering giant Whitbread announced on its website that US beverage maker Coca-Cola 's acquisition of British coffee chain Costa has been approved by shareholders of Costa's parent company, Whitbread, Pennsylvania News reported.

(voting status of Whitberry shareholders)

After the news came out, some netizens joked that Coca-Cola was going to open nearly 4000 coffee shops overnight.

However, Coca-Cola is "wayward", but Starbucks is probably in a hurry.

As one of the best brands in the world, there is no doubt about the strength of Coca-Cola.

Come to think of it, with its help, the future Costa has the capital to compete with the former in terms of financial resources and resources.

There is no doubt that Starbucks has another strong opponent!

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Why did Coca-Cola come to spoil the coffee market?

With the upgrading of consumption level, people pay more and more attention to a healthy diet.

In homeopathy, carbonated drinks have also been labeled as "high in sugar and high in calories" and become one of the synonyms for unhealthy drinks.

This shift is also profoundly reflected in Coca-Cola's performance.

Coca-Cola's revenue has fallen for the fifth year in a row since peaking at $48 billion in 2012.

According to the 2017 annual report, Coca-Cola's annual net income was $35.41 billion, down 15% from a year earlier, while operating profit was $7.501 billion, down 13% from a year earlier. Revenue and net profit fell off a cliff.

In order to break through the business bottleneck, Coca-Cola has to embark on the road of transformation.

The first thing to bear the brunt is to make a fuss on the decarbonization of cola.

Coca-Cola has successively launched Diet Coke, Zero Coke, Green Coca-Cola, Zero Sugar Coke and other products, but the results are not satisfactory.

As a result, Coca-Cola began to rely heavily on buying, trying to find new profit growth points through new brands.

Relevant data show that from 2013 to 2017, Coca-Cola acquired or acquired shares in coconut water brand Zico, cold-pressed fruit juice brand Suja Life LLC, Mexican sparkling water brand Topo Chico and so on.

In the beverage industry, the prospect of the coffee market has always been more attractive.

James Quincy, president and CEO of Coca-Cola, once said: "Coffee is one of the fastest growing beverage categories in the world, with a growth rate of 6 per cent. It is also a category with many different elements, from vending machines to coffee shops, from roasted coffee beans to capsule coffee. "

Costa, founded in London in 1978, is the second largest coffee chain in the world after Starbucks.

According to public information, Costa currently has more than 2400 stores in the UK and 1399 stores in the rest of the world's 31 overseas markets, including more than 400 in China.

Obviously, by directly winning Costa, Coca-Cola instantly has a huge coffee business platform around the world and a mature coffee industry supply chain, getting a favorable card for its layout in hot drinks.

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Of course, for Costa, being acquired by Coca-Cola is also a good thing.

Compared with Starbucks' rapid "pioneering", Costa always seems to be a step behind in the competition.

Especially for the layout of overseas markets. When Starbucks announced its entry into the Chinese market in 1999, Costa opened its first overseas store in Dubai. It was not until 2007 that Costa opened its first Chinese store in Shanghai.

I am afraid that such a Costa has never been regarded as a "threat" by Starbucks!

However, the arrival of Coca-Cola has changed things.

Because of the protection of the former tree, the future Costa has the capital to compete with Starbucks in terms of financial resources and resources.

Not only that, Starbucks faces a challenge from Internet coffee brand Ruixing in the Chinese market, which is most valued by Starbucks.

The latter specializes in coffee takeout, so that more and more Chinese people are no longer so keen to buy coffee in stores, which has put a lot of pressure on Starbucks.

According to recent results, Starbucks' same-store sales in china fell by 2% in the third quarter of 2018, compared with an unusually significant 4% increase in the previous quarter.

In addition, Starbucks' operating margin in China fell 7.6 percentage points to 19% during the reporting period.

As we all know, the decline in gross profit margin means higher costs and lower profits. In many cases, the sharp decline in gross profit margin is one of the signs that enterprises are gradually moving towards decline.

Obviously Starbucks can no longer rest easy!

(photo source: picture worm)

In this era of change and uncertainty become the norm, no kind of competitiveness is eternal.

At the moment, this sentence is perfect for Starbucks.

There is luck on the left and the passive situation of Costa on the right, so it must make positive changes, otherwise the hegemonic position that has been maintained for many years may really be "broken"!

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