When it comes to coffee, Starbucks certainly leads the pack worldwide, but that doesn’t mean the entire category is spoken for. And Coca-Cola’s recent acquisition of Costa Coffee, a serious contender, shows just how far solid social media sentiment analysis can take a brand . . . and potentially unseat another.
Caffeine Giant In Need of a Business Boost
Coca-Cola just purchased Costa Coffee and the acquisition couldn’t have come at a better time for Whitbread, the previous owner of the specialty coffee creator. Although doing well and becoming “a fixture of downtown shopping districts and train stations” in the UK, Costa’s growth had been slowing as “its shops face[d] growing competition from Starbucks and sandwich-focused Pret A Manger Ltd. and Greggs Plc.”
And then there were ‘activist investors’ to worry about.
Whitbread was at the front end of a two-year demerger plan to separate its hotel chain, Premier Inn from Costa Coffee, as investors had expressed grave concerns around “the two businesses sit[ting] uneasily together under one corporate roof” and stalling growth for both efforts. Whitbread agreed.
Positioned as “the U.K.’s largest coffee chain, with a market share of 39 percent, . . . [and] leading Starbucks, with a 25 percent share, and Caffe Nero, with 11 percent,” Costa’s quality, and consumer sentiment around it, is clear. A snapshot is always helpful as well though, to be sure:
But sometimes love just ain’t enough and even caffeine giants find themselves in need of a boost to dominate in markets beyond their current confines. And that is where Coca-Cola comes in.
Making Tasty Acquisitions
The spike in sentiment on August 31st coincides with news of Coca-Cola’s acquisition, of course, as it’s big news for the industry, putting Nestle, JAB and certainly Starbucks on alert. The name of the beverage game is all about which conglomerates can pivot most meaningfully and capture (or create new) categories, while wooing consumers away from the competition with value propositions tailored to very niche needs.
This is a game Coca-Cola plays better than most.
And as evidenced by its recent BODYARMOR buy-in to capture a sugar-conscious sports drink market, Coca-Cola always brings its A game to acquisitions, with solid consumer insight, undoubtedly powered by sentiment analysis research, informing its tactics. The beverage behemoth understands its space inside and out.
This acquisition is no different, in that it is different: “Though Coke will gain its first significant retail footprint through the deal, the company appears more interested in using its vast distribution network to help it sell Costa products in grocery stores and to restaurants.”
The conversation around Costa Coffee makes this a good bet. Although it’s a popular choice for those on the go, both Costa and Starbucks are often cited as being “too expensive” – and Coca-Cola’s goal goes beyond that anyway.
Coca-Cola seeks to become the ‘total beverage company’ internationally, so parlaying its existing Costa Coffee love to supermarket store shelves and as a tasty restaurant offering patrons will appreciate and recognize makes the most sense regardless.
The only negative around Costa that’s trending right now is one that offers an opportunity, should Costa/Coca-Cola consider playing up the issue: its coffee machines are apparently pretty annoying – making coffee shop noises while brewing. With 4,000+ likes and counting, others obviously feel the same about it.
Costa Coffee could partner with the person who tweeted this and/or other influencers to create any variety of marketing campaigns exploiting these machines, from contests around improvements to changing up the sounds each makes to delight and surprise those using them. The possibilities are endless and would only require a bit of digging around in a social sentiment tool to sleuth out the options. You’re welcome, Costa!
And what about Whitbread though (the company that sold Costa to Coke)? Are they kicking themselves now, considering the growth potential they’ve lost out on? Certainly not. They can focus on their Premier Inn company now. And with stock shares that went up 19 points on Friday, perhaps they’ll consider reinvesting those earnings in a sentiment analysis tool – to inform its offerings. We’re ready to point them in the right direction, if they do!
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