Coca-Cola-owned Costa Coffee seeks to crack China’s booming ready-to-drink market

By Guan Yu Lim

- Last updated on GMT

The company is debuting two RTD coffee products in China this year, Black Americano and Classic Latte, exclusively made for Chinese consumers ©Costa Coffee
The company is debuting two RTD coffee products in China this year, Black Americano and Classic Latte, exclusively made for Chinese consumers ©Costa Coffee

Related tags China Costa Coffee Coca-cola RTD coffee

The UK’s largest coffee chain Costa Coffee is making its first foray into an international market with its ready-to-drink (RTD) products in China.

The company will debut its Black Americano and Classic Latte drinks this year, in what is seen as a crucial market for the firm.

It says the launch marks an important step in its multi-category expansion strategy, which was accelerated after being acquired by The Coca-Cola Company in 2019. The company launched its first RTD products in UK the same year.

Chinese coffee market

Shakir Moin, chief operating officer at Costa International told FoodNavigator-Asia​, China is a priority market for the company.

According to him, the Chinese coffee market is growing, with RTD coffee primed to increase the fastest. However, he added that the RTD market is increasingly competitive.

“Considering the increasingly busy lifestyles of modern consumers, we are actively expanding our ready-to-drink portfolio to meet the demand for high-quality coffee with convenience, and to cultivate new growth areas in the increasingly competitive global coffee market​,” Moin said.

The new RTD range is touted to offer a convenient coffee experience for consumers, and is lower in sugar and fat content.

Moin said the RTD range was exclusively made for Chinese consumers and the company will work with Coca-Cola’s bottling partners for production, sales and distribution in the country.

He told us the company planned to distribute the RTD products into Tier-1 and 2 cities first, which he cited as ‘high-potential markets’, before gradually entering other cities.

The products will be available on e-commerce platforms, as well as a variety of offline retail channels including hypermarkets, supermarkets, convenience stores, traditional grocery and vending machines in China.

There are also plans to distribute the range of RTD products in other parts of Asia. He told us: “We would like to introduce the range into other markets in the future, and we will share more with consumers and the industry when plans are ready​.”

While the novel coronavirus (COVID-19) outbreak has had an impact on most businesses, it is no exception for Costa Coffee. Moin expressed: “The epidemic has caused an impact on us, but with recovery under the guidance of the government and the support of the owners, we remain optimistic about the outlook​.”

The chain first entered China in 2006, and as of 2020, has more than 500 stores in the country.

Moin added that the company was also working on new retailing solutions in China, such as the ‘express model’, which is aimed at streamlining delivery and pickup orders for customers and delivery drivers, putting the pressure off traditional stores.

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