On 13 April 2020 at 14:28 an email landed in my inbox. It was from Yavor, our Coffee Business Development Manager in Bulgaria and it confirmed our first customer order for Costa Coffee. In my 20 plus years in the FMCG industry, this will remain one of my proudest moments.
At the time Coca-Cola HBC had just embarked on a new and exciting journey in the coffee business. Coffee is a lucrative and fast-growing category and an integral part of our strategy of offering a beverage for every occasion around the clock. We were the first strategic bottling partner of The Coca-Cola Company to distribute and market the new range of Costa Coffee products at scale.
For the Costa Coffee brand, it was the first time in its 50-year history that it had moved to multi-channel distribution outside the UK, making it relevant in many more occasions.
We were all set for the roll out when the pandemic broke, dramatically disrupting and redefining the consumer landscape. Coffee “lives and breathes” in bars, cafes and restaurants. With the vast majority closed or trading severely restricted and no clear exit roadmap, conventional wisdom would suggest holding off on your biggest launch of the year.
Coca-Cola acquired the world's second largest coffee chain, Costa Coffee, in 2019. It has since been working on expanding the brand in the attractive and growing coffee category: not least with products for at-home consumption.
CCHBC has been rolling out the new Costa range - which includes whole beans, roast & ground coffee, coffee pods, and RTD coffee - across 16 European markets.
But we had two things on our side – an exceptional and desirable brand and a team with adaptability at its heart.
Analyzing the trends, we saw that the effects of the pandemic had created some interesting contradictions in shopper behaviour.
There was a shift towards affordability, as people felt less secure about their jobs, while premium products were given a new lease of life as people working from home sought to recreate their pre-COVID commute and office beverage experiences at home.
Coffee fits that context perfectly. Even before the pandemic it was experiencing a rapid evolution from a functional energy beverage into one that was enjoyed in multiple ways and formats, with specialty shops and a broad repertoire of coffee brewing devices appearing in homes.
Consequently, shoppers have become more knowledgeable and demanding. They know more about coffee origins, blends and roasting profiles vs expected taste outcome, and demand that their brand is sustainable and conscious of its environmental impact.
The pandemic accelerated these trends, pushing coffee enthusiasts to invest in replicating the closest-to-barista experience, precision, and expertise in their own kitchens.
Our emphasis at the start was almost exclusively on the “At-Home” channel, while providing solutions to our customers in the “Away-from-Home” when it would be safe to reopen, with a full range of Costa Coffee products: whole beans, roast & ground coffee, coffee pods, Ready-To-Drink coffee and self-serve barista-quality coffee on-the-go.
12 months on, we are encouraged by the lifting of restrictions and fueled by valuable learnings. Costa Coffee is available for consumers to enjoy in 16 Coca-Cola HBC countries, keeping us on track to bring it to all our 28 countries by 2023.
We are still finding our way in the category having established partnerships with 1,450 customers in the “Away-from-Home” channel and the Costa Coffee “At-Home” portfolio is available in many big international outlets and most national Supermarket chains in our launch countries.
But we have the pleasure of collaborating with strong, experienced and dedicated coffee teams in every country, people with years of experience in Coffee that help us take our capabilities to the next level and learn every day.
As for Yavor, he didn’t know it at the time, but he gave me the answer to the question “Can Coca-Cola HBC make the coffee business work?”. So, here’s to him and the many like him working every day to make a success of this fascinating part of our portfolio.