Coffee has become a quiet drag for Coca-Cola (KO) , compelling some tough thinking behind the scenes.
For perspective, the retail giant doesn’t exactly break out “hot beverages” revenue directly. However, its Global Ventures segment, essentially a catch-all including those efforts, generated $3.13 billion in 2024, or just 6.7% of total sales.
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Coffee volumes in that category dropped 3% last year, too, prompting executives to effectively rethink their position as a global growth driver.
That reality is pushing Coca-Cola to rethink its bet on a beloved and visible coffee venture.
Coca-Cola’s merger and acquisitions track record: hits and misses
Coca-Cola doesn’t exactly publish a lifetime tally of all its acquisitions, but its marquee acquisitions since 2007 total north of $27 billion.
Among the most impactful acquisitions are:
- CCE North America ($12.3 billion, 2010): The acquisition helped Coca-Cola regain U.S. bottling control, super-charging its supply chain while leading to greater efficiency in franchise optimization.
- Glacéau/Vitaminwater ($4.1 billion, 2007): The acquisition cemented Coca-Cola’s presence in premium water and functional hydration, which laid the foundation for the Smartwater and Vitaminwater lines.
- BodyArmor ($5.6 billion, 2021): The addition built Coca-Cola’s sports drink portfolio, giving it the ammunition to go toe-to-toe with Gatorade with a BodyArmor-Powerade combo.
In contrast, recent activity has been relatively muted. Coca-Cola disclosed just $315 million in acquisitions last year, and around $179 million in the first half of 2025.
Most of these are related to tax-credit partnerships, underscoring a sharp pullback in M&A cadence.
Coca-Cola quietly explores exit from its UK coffee empire
Coca-Cola just turned heads with the reported potential sale of its UK-based coffee chain, Costa Coffee.
In working with Lazard bankers to gauge interest, talks are already underway with a few of the bidders, including private equity firms.
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The soft drinks scooped up Costa Coffee in 2018 for a whopping £3.9 billion. However, in a stunning turn of events, analysts expect the deal only to fetch £2 billion (a loss of nearly half its original investment).
In 2023, the chain generated £1.22 billion in sales, up 9% from 2022 but still comfortably below the £1.3 billion booked the year Coca-Cola scooped it up.
Despite the underperformance, the brand has paid over £250 million in dividends to Coca-Cola since the acquisition.
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Coca-Cola CEO James Quincey recently discussed “reflecting” on its coffee strategy, which also hinted at a potential strategic reset.
For perspective, Costa Coffee is one of the more popular coffee houses, operating over 2,000 UK stores and 3,000+ globally, with a footprint spanning India, Mexico, Japan, and Poland.
However, competition from the likes of premium players, Gail’s, and restructuring efforts in 2022 flagged inflation and overhead costs.
Coca-Cola delivers stable Q2 with pricing power and dividend strength
Coca-Cola recently reported its Q2 results on July 22, showing steady performance despite the macro headwinds.
Net sales rose 1% year-over-year to $12.5 billion, with organic sales rising 5%. That growth was mostly led by a 6% gain in price/mix, which comfortably offset a 1% drop in unit case volume.
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Moreover, GAAP EPS came in at $0.88, while comparable EPS landed at $0.87, mostly in line with expectations.
Management reaffirmed full-year 2025 guidance with a 5% to 6% organic revenue expansion along with comparable EPS growth of roughly 3%, despite a projected 5% foreign exchange headwind.
For perspective, Coca-Cola shares have risen 12.6% year-to-date through August 22, though summer momentum has slowed, with the stock down 1.4% over the past three months. Nevertheless, the stock benefits from its defensive consumer-staples position.
On the income side, Coca-Cola remains a dividend juggernaut. In February, the company approved its 63rd consecutive annual dividend increase, boosting its quarterly payout to a healthy $0.51 (or $2.04 annualized), yielding an excellent 2.9%.
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