Coca-Cola’s (KO, $47.59) latest foray into coffee looks promising

Atlanta-based global beverage giant, Coca-Cola, is expanding its coffee business that was previously focused mainly in Japan. Now the company is ready to release Coca-Cola Coffee in more than 25 markets around the world by the end of 2019.

The drink, with slightly less caffeine content than in a normal cup of coffee but more caffeine than in a can of soda, claims it can boost the mid-afternoon energy slump among busy office workers.

The move comes as customer beverage preferences have shifted from more sugary options to less sugary options like bottled water or Coca-Cola Zero Sugar. Coca-Cola Coffee is said to contain less sugar than a Coke of the same size.

Coffee market has been steadily increasing over the years and ready-to-drink coffee is one of the fastest growing segments in the coffee industry. According to some research, this segment has grown 31% in 2016 and 2017. Chilled coffee is another ever expanding segment growing at least 10% annually in the U.S. from 2013 to 2107.

For several years, Coca-Cola has been trying to succeed in the coffee business. In 2006, it introduced coffee to its namesake brand but the project stopped after two years. In 2017, the company had another go at it and introduced Coca-Cola Plus Coffee in Australia. After several retooling formula tests, the company brought it to Asia.

Coca-Cola also has plans to sell ready-to-drink Costa coffee products in the European markets. The company acquired Costa for $5.1 billion earlier this year.

As of the current quarter, Coca-Cola’s revenue rose 5% to $8.02 billion, beating expectations of $7.88 billion.