The US beverage company says positive trading for Costa Coffee in the UK, as well as the expansion of the coffee chain globally, strongly contributed to 10% third-quarter revenue growth
In August 2022 Costa Coffee marked its first foray into bricks-and-mortar outlets in the US | Photo credit: Costa Coffee
Costa Coffee's trading performance in the UK, where it operates 2,800 stores, has been cited as a key contributor to parent company Coca-Cola's third quarter sales growth.
Atlanta-based Coca-Cola, which acquired Costa Coffee for £3.9bn ($5.4bn) in 2018, achieved net revenue growth of 10% to reach $11.1bn for the three months ended 30 September 2022.
Sales in the company’s coffee segment grew 5%, which it said was primarily driven by the continued recovery of Costa Coffee stores in the UK following the pandemic, as well as the expansion of the Costa Coffee brand across international markets.
In August 2022 Costa Coffee marked its first foray into bricks-and-mortar outlets in the US, opening its first retail store in the country in Atlanta, Georgia, before launching a second store in the same city in October 2022.
In the same month, Coca-Cola announced plans to accelerate its portfolio of Costa Coffee products in the US, including the launch of its first ready-to-drink (RTD) range.
While still representing an improvement on the corresponding period last year, the 5% growth for coffee in the third quarter of 2022 has fallen from the 15% sales increase achieved in the previous three months.
“Our strong capabilities and consumer insights continue to help us win in the marketplace. Our business is resilient amidst a dynamic operating and macroeconomic environment. We are investing in our strong portfolio of brands, which is a cornerstone of our ability to deliver long-term value for our stakeholders,” said James Quincey, CEO, The Coca-Cola Company.
Coca-Cola expects to achieve overall revenue growth of 15% for 2022, an increase on its prior forecast of 12% in July 2022. However, the beverage conglomerate cited commodity price inflation as a sustained headwind likely to impact full 2022 and first quarter 2023 sales.