Coca-Cola Must Keep Costa 'Good Guy' Brand Image To Divest From Fizzy Drinks

So that explains the lacklustre interiors, the low levels of stock and the general tired look of its outlets. Costa Coffee has known for some time that it was about to be spun out, or sold, and was doing what all companies in that position do. Keep stock to a minimum so wastage is low and don't bother designing a fresh vibrant look when the next owners are bound to want to bring their own designers in.

And good luck to Whitbread. Nobody could argue with the company turning a chain they bought for less than GBP20m into a much bigger business worth GBP3.9bn twenty-three years later. For Coca-Cola, the strategy also appears to make sense. Its low- and zero-calorie drinks are now outselling the old stalwart of regular Coke. It knows which way the wind is blowing -- rather like the oil-rich Arab states that are using oil money to invent a new future for themselves when they will not have the luxury of pumping money out of the ground. 

I have to say it answers a question at the back of my mind. Going to Costa in the last year or so has been a little bit similar to shopping at Sainsbury's. The supermarket has surely been keen to position itself as being in the best financial health as it began the process of courting and then merging with Walmart's Asda chain. In the past one could expect to be able to buy fresh fish on a bed of ice on a Sunday and stroll around packed shelves. Not any more -- they clearly want to keep ordering and wastage to a minimum, and those shelves often run out and the ice is melting without any older stock on top.

Similarly, pop into Costa after from the middle or toward the end of the lunch rush and there is little choice of food and not so many staff clearing tables. Its cafes are beginning to look a little dull and dreary, with that brown decor that just looks drab after a while. Everyone knew Whitbread was considering spinning the chain out of central ownership, so I had attributed the lack of investment and keen eye on cost and wastage to HQ wanting the figures to look good for the city. As it was, they must have been so good they appealed to Coca-Cola. Hopefully, the new owner will spruce the old place up a little now.

A major warning that the sugary drinks maker might want to consider is that Whitbread has always been a poster child for a popular British company that pays its full share of UK tax in the UK. I am not making any suggestion that Coca-Cola would consider changing that. However, I am raising it now as an issue, should the company ever consider in the future that a US tech giant approach to UK tax is acceptable.

Costa Coffee is a standard bearer for companies being responsible for paying their dues, and let's be honest, it's British. It's actually the second-biggest chain in the country behind Starbucks, so being American doesn't mean people won't drink your coffee. However, if you go from being a British chain that pays UK tax to some other arrangement, all the new owner will do is give politically conscious drinkers a great excuse to go to another cafe. 

Let's hope all of this is hypothetical and the donation jars for charity next to the cash register remain in place and the chain keeps that sense of being a good guy, although it's a massive chain. Mess with this brand image and Coca-Cola will find that GBP3.9bn is wasted.

Keep up the good work, fill the shelves with a few more sandwiches, clear the tables and update the decor and Coca-Cola could have a surefire means of divesting itself out of reliance on sugary drinks.

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