Decade of Deals: How Coffee Became the Must-Have Business

(Bloomberg) -- Coffee’s the hottest thing in deals right now.

Coca-Cola Co.'s $5.1 billion agreement to buy U.K. coffee-shop leader Costa adds to a string of deals large and small for coffee-related businesses over the past decade. JAB Holding Co., the investment firm that manages the fortune of Austria’s Reimann family, has led the way, snapping up everything from the Keurig coffee-pods business to trendy chains like Caribou.

A couple of themes are driving the transactions: Consumers increasingly are embracing stronger, artisanal brews and specialty drinks rather than watery, industrial java, and beverage companies are looking for healthier alternatives as soft drinks fall out of favor.

Nestle, already a big player in the industry because of its Nespresso pods, upped its game in May by agreeing to pay Starbucks Corp. $7.15 billion for the right to market Starbucks Corp. products from beans to capsules. 

The heyday of coffee deals may be past now, if only because there’s not much left to buy that’s sizable. One name that’s long been speculated as a target for JAB is Dunkin’ Brands Group Inc., the U.S. coffee-and-doughnuts chain. Dunkin’ shares fell in May when JAB agreed to acquire a majority stake in sandwich chain Pret A Manger.

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