On August 6th, 2020, I wrote an article about “Starbucks” and then I thought, when “Starbucks” is mentioned, the other name that always popup is “Costa Coffee”. It is like Real Madrid and Barca in football.
So, the first thing that came to my mind writing my second article is Costa. This is not a comparison, rather than answering the ones who prefer “Costa Coffee” on the same business aspect.
Studying how Costa Coffee have built their Corporate Social Responsibility (CSR) program, and with what I have seen as movements to face outbreak of COVID-19 was worth stopping for me and it drove me to dive in and learn more.
It seems that another cup of good coffee really helps us make good decisions
Costa Coffee; with 49 years’ experience of crafting the finest quality coffee. From revolutionary methods and commitment to quality to unforgettable successes that have made Costa Coffee the Nation’s Favorite* coffee shop (As it is written on their website *The question ‘What is your favorite branded coffee shop chain?’ asked to the Allegra independent panel (over 4,000 people) of which 47% cited Costa),
The Costa Coffee story began back in 1971 when Sergio and Bruno Costa arrived in London with a burning desire to make great tasting coffee a part of everyday life.
Setting up a small roastery in Fenchurch Street, they committed to crafting the finest quality coffee. It was here where the Costa brothers blind-tested 112 variations of coffee before they tasted one that was good enough to be their signature blend. They named it ‘Mocha Italia’ and it remains their signature blend to this day. In 1981, the brothers opened their first Costa Coffee shop in Vauxhall Bridge Road. It was in this innovative shop that the brothers became the first coffee providers in London to serve Espresso and crafted Cappuccino in porcelain cups so that customers could experience coffee at its best. Soon shops started opening up across prestigious locations in London, becoming destinations for fashionable Londoners.
Brothers Bruno and Sergio Costa founded a coffee roastery in Lambeth, London, in 1971, supplying local caterers. The family had moved to England from Parma, Italy, in the 1960s. Costa branched out to selling coffee in 1978, when its first store opened in Vauxhall Bridge Road, London.
In 1985, Sergio bought out Bruno’s share of the company. Bruno went on to establish a tableware company. By 1995, the chain had 41 stores in UK, and was acquired by Whitbread, the UK’s largest hotel and coffee shop operator, becoming a wholly owned subsidiary. In 2009, Costa opened its 1,000th store, in Cardiff. In December 2009, Costa Coffee agreed to acquire the Polish chain Coffee heaven for £36 million, adding 79 stores in central and eastern Europe.
The UK’s biggest coffee shop chain is Costa Coffee which has 2,400 branches. It has worldwide presence, and it operates in 25 countries. Costa has reached a contract with the world’s leading ‘Hilton’ hotel chain for the reputation of the price of goods and operation. Throughout the UK, Costa sells coffee to 60 Hotels. In 2010, Costa’s income was £339M, (23.6 per cent of WhiteBread’s sales). WhiteBread’s Financial Report in 2010 and Data monitor Business Profile in 2011, The group’s most powerful asset is its outstanding level of operation and efficiency.
In 2018, Whitbread faced pressure from two of its largest shareholders, activist group Elliott Advisers and hedge fund Sachem Head to sell or demerge Costa Coffee, the theory being the individual businesses would be worth much more than as one company. On 25 April 2018, Whitbread announced its intention to fully demerge Costa within two years. Subsequently, Coca-Cola announced a deal to acquire the chain.
On 3 January 2019, The Coca-Cola Company completed the acquisition of Costa Coffee for $4.9 billion from Whitbread.
In March 2020, all UK coffee shops were forced to close indefinitely due to nationwide lockdown rules introduced by the government with the aim to slow the spread of COVID-19. In late May, a selected few branches reopened for takeaway only.
According to Americana website, Costa Coffee was opened in Egypt in 2004, and wasoperated by Americana Group. Now the company has more than 40 outlets in prime locations in Egypt, Lebanon, Syria and Kazakhstan. while many more branches opened for drive-through orders.
Ranked as the world’s second strongest brand in restaurant sector after McDonald’s in coffee. The company is ranked according untouchable factors such as, efficiency of the brand and marketing investments. Its index was calculated in 2019 as 87.8 out of 100. (Chomka, 2019)
Moreover, it ranks as the leading coffee company in UK, as it is originally based in UK.
Costa Coffee, Acting responsibly towards several aspects of the community; they advertise they have a responsibility to implement sound social, ethical and environmental practices within their supply chains and they are committed to ensuring that all procurement practices are carried out in the most sustainable and responsible way possible.
To do this, they work closely with suppliers, sustainable practice experts and NGOs to identify, develop and implement policies for human rights in the supply chain and sustainable production for critical commodities.
by collaborating with Rainforest Alliance organization, the company in UK has managed to covert its farms into sustainable ones that has no harm on the environment. Moreover, both the organization and company had worked together to make the working life of the farmers easier and better. Every Rainforest Alliance certified farm is guided with strict instructions to meet better farming methods and working area. Recognizing that to have a sustainable coffee business they need to invest in a sustainable coffee supply, ensuring that coffee is grown in a way that protects the environment and allows the communities growing our coffee to thrive. The Rainforest Alliance is a non-profit organization, working to create a future in which people and nature thrive in harmony.
By working together with diverse stakeholders including farmers, businesses, consumers and more, the Rainforest Alliance is building an alliance to improve livelihoods, protect biodiversity, amplify the voices of farmers and forest communities, and help them mitigate and adapt to climate change.
Partnership with the Rainforest Alliance, initiated tackling some of the most pressing issues facing the planet today by changing the way we produce, source, and consume the world’s natural resources. Every Rainforest Alliance Certified farm is required to meet strict guidelines for better farming methods and working conditions, as well as better care for nature.
Sourcing sustainably. Costa Coffee is committed to ensuring that all procurement practices are carried out in the most sustainable and responsible way possible. This means being confident that critical commodities are produced in a way that protects the environment, as well as all the people who are involved in creating them.
They take care in how they source coffee beans, as well as other critical commodities including crops (such as soy, cocoa and palm oil) and animal derived ingredients such as eggs, meat and dairy.
Recycling takeaway paper cups: It all started in 2016 when the company decided to turn its stores into recycling points, and they were the first to do so. They encouraged their customers to come to their stores, leave their unwanted cups that they were about to dispose, and get it recycled. The stores accept any branded cups not only there’s. their goal in 2020 is to recycle as many cups as they sell.
Since May 2018, the company recycled 22.5 million cups.
To motivate the customers even more, they made a 25% discount when purchasing reusable cups instead of paper cups. (Responsible sourcing – Our planet | Behind the beans | Costa Coffee, 2020).
Reducing sugar in the drinks:
With the supervision of Coca-Cola, Costa Egypt decided to reduce the sugar in its drink to maintain the good health of its clients that may suffer from health issues when having sugar in their drinks. That was not an easy step to take, as some beverages should have sugar even if little in its recipes, such as cappuccino.
Sustainable Development Goals of Costa Coffee:
The triple bottom line:
This initiative is combining both social and environmental aspects. As the company is protecting the environment from harmful farming method for both the land and the farmers.
Here are some of the actions they have taken in response to the crisis
Giving free coffee and tea for NHS staff:
The company in UK decided to give free coffee for the doctors and nurses fighting coronavirus. All they have to do is to show the employee their id to confirm their identity. The aim behind this initiative was to thank the NHS staff like so many others that want to do so. The initiative started at 21st March and lasted till 4th of April. (Winchester, 2020)
Cash-free payment: The company prevented any contact with cash money between the customers and employees, and instead, paying with credit/debit cards only is the available method. The method is applied across 2500 outlets. The initiative was done to prevent or reduce the possible spread of the virus. (Costa Coffee goes cashless as Coronavirus disrupts business model, 2020)
In Egypt, Costa Coffee supported its Egyptian audience emotionally during the lockdown by posting videos on social media on how to make Costa drinks at home. Moreover, the company followed the instructions of the government and closed its stores at 7pm to 7am. Finally, they announced that they are cleaning and sanitizing their stores regularly including seats and tables.
Many activities were done by Costa Coffee page on social media, especially Instagram. They created a feed in which they published more than 10 ways to kill boredom during quarantine. Starting from movies/series to watch, Tasty Treats to make at home easily, books to read and creative DIYs to make at home with family. These activities increased the engagement on their page, especially when they started to repost their audience’s inspired activities by Costa.
Starbucks and CostaCoffee are both immensely powerful and successful brands. Both participated in the covid-19 crisis emotionally and financially.
Both organizations have set a great example on putting their believes into actions, built CSR that created a way that people love the brands and take it as lifestyle not just a coffee, this was built within the company’s mindset.
Any business should be putting the efforts to endeavor the same, putting the right Organizational behavior and culture, in Pinnacle our Organizational consultation services help companies build their core cause and support spreading this in the mindset of employees and clients through trainings, coaching and PR Services and marketing campaigns.
Setting the right goals is not enough, and bottom line profitability is creating cruel managements that only think of the profit of the shareholders despite of all stakeholders involved in the equation; In Pinnacle our Balanced Score Card consultancy and ability to build triple bottom line objectives will help your organization perform better and for a cause.
In Pinnacle we understand the challenges business face with the current dynamics, we have been helping organizations big and small to be able to face the storm of economic effect of Coronavirus by being able to assess the situation based on Lean Six Sigma methodology, then define the best strategy moving forward.
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Pinnacle® is a multi-country consultancy firm. Our consultants are spread around the world; with 70% of our consultants are women. We have built our organization on modern business model with agility, diversity, and resilience to the business dynamics. We have chosen our technology platform to support our modern mindset thus we work from anywhere …. As work is not a place anymore. We implement Lean Six Sigma in everything we do whether internally or externally at our client sites.