Coffee + Soda = Hard

Coffee isn’t soda. But Big Beverage keeps trying to play it like it is.

This week gave us two completely different moves from two of the world’s biggest drink makers. Keurig Dr Pepper (KDP) is going all-in and spending $18 billion to buy JDE Peet’s. Meanwhile, Coca-Cola is trying to unload Costa Coffee a deal it paid nearly $5 billion for just six years ago.

Two companies. Two strategies. One big question: can coffee ever actually be conquered by Big Soda?

The KDP Bet: Coffee as Empire

KDP isn’t just buying JDE Peet…..it’s betting the farm. $18 billion in cash. A 33% premium on the stock. A promise of $400 million in “synergies.”

And here’s the kicker: they’re breaking themselves in half

• Global Coffee Co. – $16B in annual revenue. From Keurig pods in U.S. kitchens to Peet’s cafes and L’OR capsules in Europe. Their shot at being Nestle 2.0.

• Beverage Co. – the soda and juice leftovers: Dr Pepper, Snapple, 7UP, energy drinks.

The logic? Wall Street loves “pure play” companies. A standalone coffee giant should be worth more than a blended soda/coffee conglomerate. That’s the idea…

The problem? Investors aren’t buying the story. Shares tanked 10% on the news. Analysts flagged debt ballooning past 5x EBITDA by 2026.

Translation: this is a massive, expensive bet on coffee margins holding up. Wall Street’s message? Prove it.

The Coca-Cola Retreat: Coffee Isn’t Coke

Meanwhile, Coca-Cola is doing the opposite—backing out.

In 2018, Coke bought Costa Coffee for £3.9B ($4.9B), dreaming of Starbucks-like growth. Thousands of cafés. Ready-to-drink Costa cans in every fridge. Costa Express machines at every corner store.

Six years later? Flat growth. Rising costs. And the hard truth: running cafés, roasting plants, and vending networks is nothing like selling soda.

Now Coke is shopping Costa around for about £2B—half of what it paid. Private equity sharks are circling. For Coke, it’s not strategy. It’s surrender.

The Contrast: Why Coffee Doesn’t Bend

Why is KDP all-in while Coke cuts and runs? Because coffee doesn’t behave like soda.

• Distribution isn’t enough. Coke thought its logistics army could scale Costa worldwide. But customers don’t buy supply chains. They buy cafes, rituals, and experiences.

• Coffee is messy. Beans vary by farm, harvest, and roast. Managing that complexity takes obsession, not just capital.

• Credibility matters. Coffee drinkers can sniff out inauthenticity fast. You can’t “brand” your way into coffee culture.

KDP thinks scale can buy legitimacy. Coke already proved it can’t. Both are learning the same lesson: coffee doesn’t follow soda’s playbook….

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What This Means for Specialty

Big Soda’s moves ripple downstream. Here’s what it could mean on the ground:

• Sourcing Pressure: If KDP leans JDE Peet’s into cost-cutting, expect more competition for the same high-end origins. Specialty roasters will need tighter direct trade relationships to secure the top lots.

• Cafe Competition: If Costa ends up in private equity hands, watch for aggressive cost-cutting and high-street expansion. Independents will need to double down on differentiation…unique coffees, elevated service, community.

• Consumer Trends: KDP’s focus is pods, convenience, and mass-market branding. Specialty’s counterpunch is education—helping consumers understand why a Yirgacheffe tastes like jasmine and why a pour-over beats a pod.

• Opportunity: As Big Soda stumbles, specialty shines. Independent cafes and roasters thrive where conglomerates fail: authenticity, community, and depth. You don’t win coffee by being the biggest—you win by being the most trusted.

  The Coffee Industry’s Dilemma

One giant is writing an $18B check to chase scale. Another is slashing its losses because culture wouldn’t bend.

The lesson? You can’t buy coffee culture. You have to earn it…through craft, story, and community.

While KDP sharpens pencils and Coke looks for buyers, specialty coffee is doing what it always does: building loyalty, one cup at a time.

The drip? Big Soda chases empire. Specialty chases soul. And history shows us which one wins in the long run…

Reading: A year into the job, Brian Niccol is betting on service, speed, and cafe vibes over pure automation. His $500M “Green Apron Plan” is a high-cost gamble to restore Starbucks’ soul and win back customers.

Watching: What does it really take to bring the world’s best coffee from farm to cup? Cole shares his six months in Panama and cupping 2,000+ coffees, navigating red tape, and seeing firsthand both the challenges of sourcing rare geishas

Listening: The xx’s debut album is minimalist, intimate, and timeless. A moody, atmospheric backdrop for late-night brewing.

Brewing: 2013 World Barista Champion, Pete Licata has launched Caffeine Control Coffee….decaf built for flavor, not compromise. Perfect for late-night brews. Watch for Pete on the podcast soon.

Distance: Buy the Drip run club. Clocking some kilometers. Help us push a few more kilometers through this week?

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