27 June 2019 | India

Coca-Cola reportedly seeking stake in India’s largest coffee chain

US beverage giant, which acquired the UK’s largest coffee chain Costa Coffee in 2018, is rumoured to be in talks to acquire a ‘significant’ stake in Café Coffee Day

Cafe Coffee Day is the Indian coffee shop market leader with around 1,500 stores | Photo: Michael Van Vleet



US beverage giant, Coca-Cola, has reportedly entered into exclusive talks to acquire a ‘significant’ stake in India’s largest coffee chain, Café Coffee Day. According to India’s The Economic Times, two unnamed Coca-Cola officials said their company was attempting to gain a foothold in India’s rapidly developing coffee shop market.

“The potential stake acquisition is being driven by Coca-Cola’s headquarters in Atlanta, and officials from the beverage maker’s global team are engaged in active talks with the Coffee Day management. It would give Coca-Cola significant scale in the fast-growing café business, compared to soft drinks,” said one of the sources.

A Coca-Cola spokesperson said the report was speculative and declined to comment as a matter of company policy.

Established in 1996, Café Coffee Day is India’s largest coffee chain, operating more than 1,500 cafes in the vast South Asian nation and a further 250 stores across Europe, Malaysia, Egypt and Nepal, serving 1.8 billion cups of coffee annually according to its marketing. In comparison, the world’s largest coffee chain, Starbucks, operates around 100 Indian stores under a joint venture with domestic conglomerate TATA.

Coca-Cola already has a presence in the Indian coffee shop market via UK-based Costa Coffee, which it acquired for $5.1bn in 2018. Costa Coffee currently operates 46 outlets via master franchise Devyani International Pvt. Ltd which closed around half of the brand’s loss-making Indian stores in 2017. A significant stake in Café Coffee Day would, however, enable Coca-Cola to open a far larger competitive front in India and the wider Asian coffee shop market.

In the highly competitive Chinese market, Costa Coffee currently operates around 440 stores and aims to have 1,200 stores in the East Asian nation by 2022. Market leader Starbucks has 3,700+ Chinese stores and plans to reach 6,000 stores in 230 cities across the mainland China 2022. 
 

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