Why Beverage and FMCG Giants Are Buying Coffee, and What Africa Should Learn

Food, drink and grocery groups are moving into coffee because they own the shelf, the truck, the till and the vending machine, and coffee is a habit product that fits that machinery. The takeover is real but uneven, and the most expensive attempt so far has also been the most humbling.

## Five deals, four regions

**Africa 1: Shoprite buys Vida e Caffè.** Shoprite signed an agreement on 20 August 2026 to acquire 100% of Vida e Caffè, covering its South African and international operations, and disclosed it with results on 1 September. Completion is expected during its 2027 financial year, subject to regulatory approval. Vida runs 400 stores across eight countries, most of them in South Africa. No price was disclosed for Vida alone, but the Vida and R&A Cellular deals together are estimated at about R1 billion. Shoprite's CEO said the deal strengthens the group's presence in coffee and quick-service restaurants. Shoprite is a grocer rather than a drinks company, but the logic is the same. Neither of its two deals adds a supermarket. Vida gives Shoprite formats it does not operate, such as forecourts, drive-thrus and counters inside other retailers' stores. Vida already sells through delivery platforms and its own app, and runs coffee bars inside SPAR and Exclusive Books stores. The lesson is that coffee is a frequent, low-ticket purchase that brings shoppers back, and a retailer with African scale can plug it into its own network. One open question is that Shoprite's Checkers banner has a partnership with Starbucks in South Africa, and it is not yet clear how the deal will affect that.

**Africa 2: Coca-Cola HBC buys the pipe.** Coca-Cola HBC agreed to buy 75% of Coca-Cola Beverages Africa for US$2.6 billion, implying US$3.4 billion for 100%. The target has 37 bottling plants, 106 production lines and over 800,000 outlets across 14 markets. The buyer's portfolio includes Costa Coffee and Caffè Vergnano. This is a takeover of distribution, not of a coffee company. It shows where the value in African RTD sits. RTD coffee in Africa is tightly held, with the top five companies (Arla, KDP, Nestlé, Coca-Cola and Woolworths) at 96.31%.

**USA: Keurig Dr Pepper buys JDE Peet's.** KDP agreed to pay €31.85 per share in cash, a 33% premium, valuing the equity at €15.7 billion. It acquired 96.22% of the shares on April 1, 2026. KDP expects about $400 million in cost synergies over three years and calls coffee a $400 billion global category. The twist is that KDP will split the assets into a US-focused Beverage Co and an international Global Coffee Co. The beverage company buys coffee scale, then separates it into a pure-play coffee business. KDP's earlier move was lighter: a 33% stake in La Colombe for US$300 million, with a long-term distribution agreement for its ready-to-drink coffee. That is the "rent the brand, own the route" model.

**Europe: Coca-Cola and Costa, the cautionary tale.** Coca-Cola bought Costa in 2018 for an enterprise value of $5.1 billion. By 2024 Costa's revenue was £1.2 billion, only 1% higher than in 2023, with an operating loss of £13.5 million. Coca-Cola's CEO admitted the business had not delivered the growth hoped for from ready-to-drink coffee and at-home machines. A planned sale was reportedly abandoned after private equity bids fell short. Owning cafés was not the prize. This is also the risk Shoprite must manage with Vida.

**Asia: Japan, where beverage companies already own coffee.** Coca-Cola Japan (Georgia), Suntory, Asahi and Kirin hold significant shares of a market worth about USD 8.99 billion in 2026. Japan has around 3.93 million vending machines, and consumers buy an average of 100 canned coffees a year. Logistics and vending infrastructure create high entry barriers. Asia-Pacific held 65.73% of global RTD coffee in 2025. Nestlé plans a new Nescafé and RTD plant in Southeast Asia, due to be operational in the second half of 2028.

## Why coffee beverage is so profitable

1. **It is a habit.** 67% of US adults drank coffee daily in 2025. Repeat purchase is what distributors are built for.

2. **The bean is a small part of the price.** A finished cup, can or bottle carries milk, sweetener, packaging, brand, rent and shelf margin on top of the coffee. This is structural reasoning rather than a published margin figure, and it weakens when green coffee spikes. The international composite price averaged 304.68 US cents/lb in December 2025.

3. **Existing infrastructure carries the cost.** Bottlers and grocers add coffee to trucks and stores already reaching the same customers.

4. **Premium and functional formats lift price.** Starbucks and PepsiCo launched a Coffee & Protein bottle with 22 grams of protein in May 2026.

5. **Coffee offsets fizzy-drink decline.** Falling carbonated soft drink and energy drink demand is one driver of RTD coffee.

## How RTD production, distribution and sales fit

**Production:** brewing or extraction, blending with milk and sweetener, heat treatment, then filling into cans, PET, glass or aseptic cartons. Global RTD coffee volume topped 31 billion litres in 2025, with cans at 44%.

**Distribution:** bottler networks, direct-store-delivery fleets, vending and convenience stores. This is the moat.

**Sales:** Convenience and grocery took 47.72% of Japan's 2025 sales, with online growing fastest at 8.03% a year. Estimates of the global RTD coffee market in 2026 range widely, from about USD 17 billion to about USD 39 billion, with annual growth forecasts between roughly 5.7% and 8.6%. Definitions differ, so treat any single number with care.

## Caveats

The "takeover" story has limits. Costa shows scale can destroy value. High sugar content is also restraining growth in RTD iced coffee. The Shoprite deal is not yet complete, and KDP's separation was targeted for year-end 2026, so check for newer developments.

## What African governments can learn

- **Treat value addition as industrial policy.** Vietnam added 1.92 million bags of soluble coffee capacity between 2020 and 2025, and India 0.89 million. Africa mostly ships green beans, so incentives for roasting, soluble, aseptic and canning lines matter.

- **Invest in the route to market.** Cold chain, power, roads and formal retail are what let a bottler reach 800,000 outlets.

- **Use merger review as leverage.** Regional competition bodies already review these deals, as the COMESA Commission did for Java House. Vida is a live test. Attach local-sourcing, origin-labelling and supplier-development commitments.

- **Plan for health regulation.** Sugar rules will shape formulations, so low-sugar, African-origin coffee is a policy-compatible product.

- **Hedge the farmer.** Price swings hit smallholders first, and they are the supply base every buyer depends on.

## What African agribusiness can learn

- **Sell into the platform, not to it.** Co-packing, toll-filling and private-label supply to retailers like Shoprite and bottlers like CCBA build volume without owning 800,000 outlets.

- **Own a brand or a format, not just a commodity.** Origin-story cold brew, robusta concentrate and functional lines are open lanes.

- **Avoid the Costa trap.** Cafés build brand but scale slowly. Vida's mix of corporate and franchise stores in forecourts, drive-thrus and other retailers' stores is a lighter model, and worth watching under Shoprite.

- **Negotiate distribution terms early.** The KDP–La Colombe model, a minority stake plus a distribution deal, keeps upside while borrowing reach.

- **Be sourcing-ready.** Consistency, traceability and volume are what a retailer or bottler needs before listing a supplier.

## Bottom line

Beverage and FMCG companies are not really buying coffee. They are buying its most habitual, repeatable and widely distributed forms. Africa's opening is to supply that machine while building brands and processing capacity at home. Shoprite's Vida purchase shows the machine now includes the continent's biggest grocer.