Surprising or Not? Coke's Move on Costa

Coca-Cola's announcement last week that it was acquiring British high street coffee chain came as a big surprise to many, but on second look it might not be as surprising as was initially expected.

It's another example of big brands exploring non-traditional channels, one that sees Coca-Cola move out of retail and onto the high street. We saw this when Coca-Cola's rival Pepsi acquired SodaStream, taking the brand on a non-conventional route to market, moving into the home.

Most comment is around Coca-Cola expanding its options for the increasingly healthy consumer, but, it's the new channel being explored by the drinks giant that has caught our eye most.

thefoodpeople's co-founder Charles Banks commented on the new acquisition.

"It was coincidental that Coca-Cola moved into coffee in the same week that the government once again put fizzy drink manufactures in the spotlight over the health of young people. Many have commented that this is a move into a 'health safe space' for Coke away from the controversy of sugar in soft drink. Certainly this is the latest in a line of moves by global food and drink companies who are diversifying out of sugar but also into new distribution channels.

"PepsiCo recently bought the fizzy drinks brand SodaStream whilst Nestlé has license to sell Starbucks coffees and teas around the world. At TFP we're equally as inspired by this very canny twist in route to market diversification, Coke will own 4,000 Costa stores in 32 countries, with more than 2,400 of those in the UK, as well as more than 8,000 self-serve Express machines. Demand for coffee is growing far ahead of soft drinks, there is a demand for coffee products being driven by a millennial audience.

"Whilst we may be nearing peak coffee in the UK, globally there are still potentially huge markets, such as China, where the coffee movement is still in its relative infancy. We'll watch with interest to see how this game changing move unfolds over the next 12 months."

Let us know what you think of the move by the fizzy drinks giant over on Twitter @thefoodpeople.