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4050.83
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For many years, the soft drinks giant has been trying to diversify its product mix.
Coca-Cola has long been not just Coca-Cola, it purchases and develops various drinks on its own, from mineral water to natural juices. As we can see in the chart below, the company already has a portfolio of over 20 different brands, and this mix is on a growth trend.
However, if The Coca-Cola Company purchase a manufacturer of natural juices in England, this is a seemingly a reasonable move. However, in 2019, the company decided to make a move that surprised many and was completely unusual.
The company purchased Costa Coffee, one of the largest coffee shop chains in the world, for $4.9 billion.
The purchase of Costa, which operates in 30 countries, seemed different from the company's large purchases in the past. It is not another purchase of a new sports drink brand; they acquired a very large chain of coffee shops. In England, for example, Costa is the largest coffee shop chain in the country; it has about 2,680 branches, compared to 1,000 branches operated by Starbucks in the British Isles.
In a public announcement after the purchase, Coca-Cola CEO James Quincey said: "We see great opportunities for value creation through the combination of Costa's capabilities and Coca-Cola's marketing expertise and global reach."
The company explained that it sees great potential in the global coffee market, and the cooperation with Costa will allow both companies to launch new products and reach new audiences. But then shortly after the purchase, the corona epidemic arrived, which of course completely disrupted Costa's activities around the world, and many branches were closed for long periods.
However, now that the epidemic seems to be over, and the world is returning to normal, Costa, which is now a subsidiary of Coca-Cola, has announced that it is opening the company's first branch in the US. The first branch will of course open in Atlanta, near Coca Cola's headquarters. The company of course plans to open more branches. This move, especially with a big company like Coca-Cola behind it, is certainly very intriguing.
So does Coca-Cola want to be the next Starbucks? We will have to wait and see.
Michael Green
Chief Market Analyst with over 15 years experience with candid commentary and focuses on daily market analysis and financial research writing
Disclaimer: The article does not constitute investment advice or marketing that takes into account the data and the special needs of each person.
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Disclaimer:
The Score performance whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained.
The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained. The Readiness Indicators, Sentiment Indicators and total score are calculated by the retroactive application of a model constructed on the basis of historical data and based on assumptions integral to the model which may or may not be testable and are subject to losses. Active trading is generally not appropriate for someone of limited resources, limited invesment or trading experience, or low-risk tolerance. Your capital may be at risk.
Please note that no offer or solicitation to buy or sell securities, securities derivatives of future products of any kind, or any type of trading or invesment advise, recommendation or strategy, is made, given or endorsed by TrendSpott including any of their affiliates ("TS").
This information is provided for illustrative purposes only. You should not rely on any advice and/or information contained in this website and before making any investment decision. we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.
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Disclaimer:
The Score performance whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained.
The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained. The Readiness Indicators, Sentiment Indicators and total score are calculated by the retroactive application of a model constructed on the basis of historical data and based on assumptions integral to the model which may or may not be testable and are subject to losses. Active trading is generally not appropriate for someone of limited resources, limited invesment or trading experience, or low-risk tolerance. Your capital may be at risk.
Please note that no offer or solicitation to buy or sell securities, securities derivatives of future products of any kind, or any type of trading or invesment advise, recommendation or strategy, is made, given or endorsed by TrendSpott including any of their affiliates ("TS").
This information is provided for illustrative purposes only. You should not rely on any advice and/or information contained in this website and before making any investment decision. we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.
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