Fri, 29 Aug 2025

Fri, 29 Aug 2025 How coffee chains like Costa lost the matcha generation

Costa's owner Coca-Cola is reportedly looking to sell the chain as its popularity cools off. What, if anything, has gone wrong?

* Lucy Williams went to Blank Street Coffee after seeing its pastel-hued drinks on TikTok, and ordered an iced strawberry matcha.
* Costa Coffee, owned by Coca-Cola, is struggling due to changing coffee trends among younger generations, with analysts saying it's not where they want it to be.
* Costa has reported revenues of £1.2bn in the 2023 financial year but made an operating loss of £14m due to inflationary pressures and increased prices.
* Coca-Cola is exploring options for Costa, including a potential sale, which could value the chain at less than half of what it paid in 2019 (£4.9bn).
* Blank Street Coffee has gained a cult following among celebrity fans and has expanded rapidly across London and other cities.
* The rise of smaller chains and artisanal independent stores has "eaten into the share" of major chains, with younger people increasingly choosing to support smaller businesses over big coffee chains.
* Analysts say that businesses need to reimagine themselves and respond to changing consumer behavior in order to stay ahead in the market.
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