Costa Coffee Set To Brew New Chapter As Bain Capital Bids In Landmark Sale

Bain Capital, the American private equity giant and owner of well known brands such as Gails and Pizza Express, has tabled a first round offer for Costa Coffee, setting the stage for a major shift in the global coffee landscape. The bid, reported to be in the range of £15 billion to £2 billion, comes as Coca Cola seeks to offload the UKs largest coffee chain after a challenging period for the business.

Coca Cola acquired Costa Coffee from Whitbread for £39 billion in 2018, anticipating robust growth and a strong foothold in the booming coffee sector. However, the chain has struggled to meet expectations, with declining sales recorded every quarter in 2024 amid broader difficulties facing the casual dining industry. The move to sell was triggered in August, with finance experts at Lazard brought in to oversee the potential disposal.

Apollo Global, notable owners of The Restaurant Group and parent company of Wagamamas, explored a bid but decided not to proceed after early discussions failed to yield progress. This left Bain Capital as the leading contender to acquire Costa Coffee, the worlds second largest coffee chain after Starbucks, with its extensive network of over 2700 outlets across the UK and Ireland.

James Quincey, chairman and chief executive of Coca Cola, acknowledged that Costa had not delivered on its investment hypothesis. He indicated that the firm is now rethinking its strategy in the coffee market, reflecting on lessons learned as the company pursues alternative avenues for growth while maintaining Costa operations until the sale concludes.

Costa Coffee traces its roots to 1978, when brothers Bruno and Sergio Costa opened their first roastery in Lambeth, south London. The business was purchased by Whitbread in 1995 for just £19 million, a far cry from the substantial sums now circulating in its latest changing of hands.

The outcome of the sale is poised to shape future trends in the coffee sector and reflects both the enduring appeal and rising challenges present in the UKs highly competitive food and drink market.