Coca-Cola Expanding in Last Beverage Frontiers of Coffee, Milk

  • Co. to sell Brazil’s Arabica beans in domestic market
  • Coca-Cola is introducing new line of packaged coffee beans

Coca-Cola Co. is planning to sell packaged arabica coffee beans to Brazilian consumers as the world’s largest soft-drink producer expands in breakfast beverages.

The Atlanta-based company will sell packaged beans through a local tea brand it owns called Leao as it seeks further diversification, Coca-Cola’s Brazil unit said Thursday. Coca-Cola has a partnership agreement with coffee exporter Tristao Companhia de Comercio Exterior, which will acquire and roast the beans. The company didn’t provide the deal’s financial details.

Coca-Cola, which for more than a decade has expanded to other products including juice, tea and mineral water, is now advancing into coffee and milk as it seeks a broader portfolio of breakfast products, said Sandor Hagen, vice president of new businesses at the company’s Brazilian unit. The company is concluding the acquisition of dairy products maker Laticinios Verde Campo in Minas Gerais, Brazil, as part of the strategy.

“Those were the two last frontiers in the beverage sector,” Hagen said in a telephone interview.

Coca-Cola will focus on high-end coffee drinkers as it plans to offer blends made exclusively from arabica, the premium beans favored by coffee-house chain Starbucks Corp. While Brazil is the world’s top producer of arabica coffee, those beans are primarily exported and rarely accessed by domestic consumers, according to Hagen.

"We realized we had an opportunity in offering export-quality coffee to Brazilians," he said.

Arabica coffee for September delivery slid 0.4 percent to $1.5155 a pound on ICE Futures U.S. at 11:40 a.m. in New York. Earlier it rose as much as 1.6 percent to $1.5465 a pound, the highest for a most-active contract since February 2015.