Business
How coffee chains like Costa lost the matcha generation
Rachel Clun & Connie BowkerBusiness reporters, BBC News
BBCLucy Williams is enjoying an iced strawberry matcha after going with her sister to her niece’s first-ever haircut.
“I feel like a strawberry matcha is a coming out with your sister thing, rather than an everyday thing,” she says.
But here in the UK, you can’t get an iced strawberry matcha – or any kind of matcha at Costa Coffee.
Lucy is at Blank Street Coffee where a rainbow array of matcha drinks have gained the chain a cult following, including celebrity fans Molly-Mae Hague and Sabrina Carpenter.
Lucy drinks coffee at home every day, but buys a barista-made cup for when she wants a treat.
“There are only certain places I’d go for a coffee,” she says and Costa is not on her list.
Costa’s owner Coca-Cola is reportedly looking to sell the chain, with one analyst suggesting it could go for £2bn – about half of the $4.9bn (£3.9bn) it paid in 2019. So is something going wrong?
The Boston Globe via Getty ImagesCoffee and tea drinking trends are changing particularly among younger generations, analysts say, and when combined with higher coffee prices and cost of living pressures in general, chains like Costa are in hot water.
But not Blank Street which began in 2020 as a tiny coffee cart in the garden of a Brooklyn diner before expanding across New York, Washington and Boston. It opened its first London store in 2022 and now has about 35 in the capital with three more in Manchester, two in Birmingham and two in Edinburgh.
Its popularity has in part been driven by its TikTok appeal, with fans posting videos of themselves ordering in its minty fresh decorated cafes or at free tattoo pop up events.
For Australian travellers Bree Taylor and Rebecca Trow, both 27, Blank Street was on their London to-do list after seeing its pastel-hued drinks on TikTok.
“We saw it and were like ‘we have to go there’. We saw it and came here specifically. We wanted to try it,” says Rebecca.
Lauren Nicholson, 24, and Jordan Brookes, 27, were also drawn to the cafe for its brightly coloured matcha which cost just under £5 each.
Jordan says he started drinking matcha about two months ago and is now “hooked”.
He’s not the only one – the worldwide matcha craze means supplies of the bright green Japanese tea are drying up and the demand is pushing up prices.
Costa’s rivals have jumped on the trend with Starbucks and Pret offering an iced matcha latte and Nero a strawberry and vanilla iced matcha latte.
And it is not just a London thing – popular national chains like Gail’s and Black Sheep Coffee make it. The latter offers green matcha waffles too.
Seeking out a new luxury drink as an affordable treat is a trend that emerged since Covid and has continued to grow as the cost of living remains high.
“If you think about a lot of gen Z, they’re looking at matcha, they’re looking at brews, they’re more healthy. My late teenagers, they don’t drink caffeinated beverages at all,” says Danni Hewson, head of financial analysis at AJ Bell.
Traditionally, matcha is considered to contain antioxidants and have a more tempered caffeine effect than the “high” and “crash” of regular coffee but there is some debate over any proven health benefits.
Alongside standard coffees, Costa serves a variety of frappé and fruit coolers, but these contain syrups and can be topped with whipped cream which may not appeal to the clean-living green-juice sippers among us.
With the rising popularity of home coffee machines, chains have to come up with special reasons to get customers through the door.
Getty ImagesCosta is not the only brand struggling with the changing UK coffee market, says Clive Black, vice chairman of independent investment group Shore Capital.
The rise of smaller chains and artisanal independent stores have also “eaten into the share” of the major chains, he adds.
Young people increasingly care about spending choices – Lauren and Jordan both say they generally avoid big coffee chains in favour of supporting smaller businesses, but also because of considerations about the taste.
And when a coffee can cost you the best part of £5 you expect something you can’t make yourself.
“A straight up latte isn’t a treat, that’s a necessity,” says Clare Bailey, independent retail analyst and founder of The Retail Champion.
“I feel like businesses that don’t reimagine themselves and don’t respond to consumer behaviour, and perhaps get a little complacent, are the ones who end up in trouble,” she adds.
Coca-Cola’s chief executive James Quincey admitted to an investor call last month Costa was “not where we wanted it to be” and the company was “thinking about how we might want to find new avenues to grow in the coffee category”.
Costa began as a London roastery in 1971 and has since expanded to more than 4,000 stores and with operations in 50 countries. It is a prominent feature of many a high street in small towns across the country, often appealing to families.
In the 2023 financial year, the most recent report, Costa reported revenues of £1.2bn, but said inflationary pressures including increased prices of goods, energy and pay resulted in an operating loss of £14m.
Now Coca-Cola is working with investment bank Lazard to explore its options for the coffee chain, including a potential sale, according to reports from Reuters and Sky News. Clive, from Shore Capital, says it is not clear why Coca-Cola bought Costa in the first place.
Costa, Coca-Cola and Lazard were all approached for comment.
There are now 11,450 branded coffee chain outlets across the UK, up from 9,800 five years ago, according to World Coffee Portal.
And the number of independent coffee shops has also risen over the last five years from 11,700 to around 12,400 now.
With so much choice, competition to attract customers heats up. Mimoza Emsa, 47, says while she used to drink Costa, she now always goes to Pret because it’s close to her work and she has its subscription which offers discounts.
“It’s really convenient. It’s one of the things that persuades me to have coffee here,” she says.
Costa and similar chains are not as quick and cheap as a Greggs or McDonalds coffee, but also don’t offer the higher-end experience for when we want to treat ourselves.
“We’ve seen all these middle of the road retailers struggle because they’re neither one thing nor the other,” says retail analyst Clare.
Despite these shifts, Costa still has loyal customers.
Rafik Khezmadji, 37, says he comes to Costa because it’s close to work, but he also enjoys being able to sit outside and savour his coffee.
“I enjoy having this moment to myself,” he says.
For 20-year-old fashion business student Megan Penfold the coffee at Costa is “not the worst and not the best”. She has stopped at the cafe on Wigmore Street in London for a quick black coffee.
“Trends don’t affect me as much. I like what I like,” she says.
Correction: An earlier version of this story said Coca-Cola bought Costa for £4.9bn in 2019. The figure was actually $4.9bn, which was worth about £3.9bn.
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Atul Monga of BASIC Home Loan highlights how fintech, local agents, and partnerships are making home loans more accessible in Bharat’s smaller towns.
In smaller towns, one of the main challenges is that a lot of people don’t have formal income proof or a credit history.
Home loan accessibility in India has long been a challenge, especially beyond metro cities. While urban borrowers often have easier access to credit thanks to formal incomes and established credit histories, millions in Tier 2 and Tier 3 cities continue to face hurdles ranging from lack of awareness to documentation gaps. With the rise of fintechs, local partnerships, and technology-driven solutions, the landscape is gradually shifting.
In this interaction, Atul Monga – CEO & Co-Founder, BASIC Home Loan, shares insights on the biggest challenges, innovations, and the road ahead for making homeownership more inclusive across Bharat.
1- What are some of the biggest challenges in making home loans accessible in smaller towns and cities?
In smaller towns, one of the main challenges is that a lot of people don’t have formal income proof or a credit history. Additionally, financial literacy tends to be lower, which can confuse the loan process. Lack of awareness about loan eligibility, benefits, and the application process often leads to consumer inertia, and many borrowers simply don’t take the first step. Additionally, things like inconsistent documentation, limited lending options, and the need for physical verification of the property further create more friction.
Today, banks and fintech companies are attempting to address this scenario in various ways. The solution lies in a phygital approach, which brings together digital tools and a strong network of local agents. These agents work directly with customers, guiding them step-by-step, building trust, and making sure even those with limited financial paperwork can navigate the process smoothly.
2- What are some of the challenges that people and lenders face when it comes to Last Mile Connect?
Last Mile Connect in home lending can be quite challenging, especially in smaller towns. The digital infrastructure is still developing in many areas, which means things like poor internet access, patchy documentation, and low financial awareness can make it hard for lenders to accurately assess a borrower’s profile or risk level.
Many borrowers feel unsure about navigating the process online without any personal guidance. There’s also a fear of fraud, and the cumbersome paperwork involved can feel overwhelming. Without someone local to assist, even well-intentioned or eligible borrowers often drop off halfway through.
The good news is that things are gradually improving now, thanks to steady advancements in fintech and digital infrastructure that are making loans more inclusive and accessible than ever before.
3- How are fintechs helping people with informal incomes or no credit history get access to home loans?
Fintechs have made home loans more accessible for people without formal incomes or credit history. Traditionally, lenders relied heavily on salary slips and credit scores to determine the borrower’s creditworthiness, but this leaves out a major chunk of the population, especially from the informal sector.
Now, with the help of technology, we are able to look beyond such traditional indicators. By using alternative data like bank transaction patterns, utility bill payments, and digital footprints, we can create a reliable credit tracking system for people who don’t fit the conventional mold.
4- What are the common concerns or roadblocks that first-time homebuyers in unreserved areas usually face?
First-time homebuyers in unreserved or semi-urban areas often struggle with unclear or incomplete property titles, which can create legal complications and make it difficult to get a loan approved. Many of these areas also lack RERA-approved projects, which adds another layer of risk for both buyers and lenders.
There’s often limited awareness about how home loans work, what’s required, how interest rates are structured, or what documents are needed. Another common hurdle is that property values in these regions tend to be modest, but lenders may still have high minimum loan amounts, making it harder for buyers to qualify.
Lenders, Fintechs like BASIC Home Loan, and local real estate developers are working together to bridge the gap and create more accessible loan products, streamline documentation, and guide homebuyers through the process. This collective effort would certainly help unlock home ownership for a segment that has long been underserved.
5- Why is local presence important like field agents or developer tie-ups, important in driving home loan adoption beyond metro areas?
Local presence plays an important role when it comes to building trust, especially in the heartland of Bharat, where digital-only models still feel distant or unfamiliar. For many first-time borrowers, human interaction still matters, and this is where the field agents come in. They don’t just help with the paperwork, but also build confidence, address consumer concerns and guide them through every step of the journey.
Developer tie-ups are equally important. When we work with trusted local builders, we can ensure that the properties are already verified and pre-approved for financing, which significantly reduces the loan process. Which is why we have partnered with real estate developers to offer curated property options and faster loan turnarounds to customers.
6- How are strategic partnerships between lenders, fintech platforms, and HFCs unlocking housing loan access in India’s Tier 2 and Tier 3 cities?
Strategic partnerships are at the heart of expanding home loan access, especially in India’s smaller cities. By working together, fintechs, lenders, and HFCs will be able to bring speed, flexibility, and trust to markets that have long been underserved, thereby making home ownership a more realistic goal for millions across Bharat.
7- What are some innovations or changes you see coming that could make home buying easier and more inclusive across India?
Homebuying in India is witnessing crucial transformations, especially outside the metros. Digitised property records, e-KYC, and geo-tagging of properties are already beginning to ease long-standing verification bottlenecks.
AI-led credit scores will further open doors for borrowers with informal incomes or limited credit backgrounds. Embedded finance options, where home loans are integrated directly into real estate platforms, can further make the process seamless for borrowers.
The future of home ownership in India will be shaped by a combination of hyperlocal support and smart, scalable technology. It’s about bringing the same ease of access and trust that metros enjoy to Tier 2, Tier 3 cities, and eventually to every corner of Bharat.
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al…Read More
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al… Read More
August 31, 2025, 16:38 IST
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Chris BaraniukTechnology Reporter
Boston MetalAn activity centre for babies and toddlers, an Indian restaurant, an indoor golf centre – and a mini experimental steel plant. These businesses are among those that make up a small retail and industrial estate in the city of Woburn, Massachusetts.
“People are dropping off their kids. That kind of shows you an extreme example of what the future of steel looks like,” says Adam Rauwerdink, vice president of business development at US-based green steel start-up, Boston Metal. “You can be making steel and sharing a parking lot with a daycare.”
Boston Metal has come up with a way of using electricity to remove oxides and other contaminants from iron ore, which is the substance you have to mine from the Earth before you can make new steel.
The process involves distributing the ore within an electrolyte and then using electricity to heat this mixture to 1,600C. Molten iron then separates from impurities and can be tapped off.
Traditionally, extracting that all-important iron from ores requires blast furnaces that run on fossil fuels. But the iron and steel industry are responsible for 11% of global emissions – a huge amount, equivalent to all the world’s private cars and vans – and so now a race is on to find greener ways of producing these important metals.
US companies are, arguably, at the forefront. Steelmaking in the US is already greener than in many countries, thanks to the popularity of electric arc furnaces there. These furnaces use electricity, not heat from burning fossil fuels, to melt scrap steel – for example – and recycle it.
Plus, a handful of emerging start-ups such as Boston Metal say they can go one better and use electricity for the iron-making process, a crucial step in making brand new, or virgin, steel.
However, the Trump administration has taken a less than enthusiastic stance towards renewable energy and decarbonisation projects. It remains to be seen whether these new start-ups will make a big, molten splash in the steel industry any time soon.
Switching from traditional blast furnaces to electric arc furnaces can lower carbon emissions per tonne of steel produced from 2.32 tonnes of CO2 to 0.67 tonnes of CO2.
For iron-making, some plants could use green hydrogen – made using electricity from 100% renewable sources – says Simon Nicholas, lead steel analyst at the Institute for Energy Economics and Financial Analysis.
But switching iron and steel-making plants over to green hydrogen hasn’t gone as smoothly as some had expected.
In June, Cleveland-Cliffs, a major US steel producer, appeared to back away from its plans to build a $500m (£375m) hydrogen-powered steel plant in Ohio. The BBC has contacted Cleveland-Cliffs for comment.
“We’re seeing projects cancelled, proponents pulling out of projects all over the place,” says Mr Nicholas, of green hydrogen initiatives, specifically.
Bloomberg via Getty ImagesPlus, there is a limit to how much steel-making can rely on electric arc furnaces since they currently largely rely on a supply of scrap steel.
A relatively low supply of scrap steel in China, versus demand, has slowed the rollout of electric arc furnaces there, according to some analyses.
These headaches would suggest that there is a niche for companies developing alternative ways of making iron and steel. Boston Metal is one.
“It looks a lot like how we make iron and steel today – it’s a lot easier to conceive how that would get to scale [as a result],” says Paul Kempler, an expert in electrochemistry and electrochemical engineering at the University of Oregon.
However, he notes that there are still challenges in ensuring that electrolysis systems like this don’t corrode too quickly over time. Boston Metal says it hopes to have its first demonstration-scale steel plant operational by 2028.
ElectraSeparately, the US firm Electra is taking a different approach to producing highly purified iron from ores. Unlike Boston Metal, Electra’s process runs at a relatively low temperature, around 60-100C. First, iron ore is dissolved into an acidic solution and then an electrical charge causes the iron to collect onto metal plates. This is similar to the process currently used for making sheets of copper and zinc today.
“These plates are extracted automatically out of the solution and the iron is harvested,” says Sandeep Nijhawan, co-founder and chief executive. A demonstration plant in Colorado, which could produce 500 tonnes of iron annually, is currently set to open next year.
Initially, iron produced in this manner would cost more than iron made using traditional techniques. But that “green premium” could fall away should the company be able to scale sufficiently, says Mr Nijhawan.
Bloomberg via Getty ImagesMr Nicholas says that emerging technologies such as this are hopeful, but one challenge they face is in breaking into the market in a big way within just a few years, since the need to slash emissions and curb climate change is become more and more urgent: “We’re running short of time for addressing carbon emissions.”
Companies such as Electra and Boston Metal offer a completely different vision of the steel-making industry but they won’t get far without further investment – and a market that appreciates what they are doing.
President Donald Trump’s tariffs on steel imports to the US are supposedly designed to protect the domestic steel industry – and yet they risk raising the cost of steel substantially for US customers.
I ask whether Dr Rauwerdink, for one, is happy to see this move, or not. “We’re quite happy to see the strong focus on critical metals,” he says, arguing the tariffs are “beneficial” for Boston Metal.
Though he acknowledges that US government’s attitude towards renewable electricity, which Boston Metal says it want to prioritise as an energy source, has changed lately. And, globally, keeping the cost of renewable energy low is important for any firm hoping to electrify industries previously dominated by fossil fuels.
“The industry has growing pains there, for sure,” he says.
Dallas Cowboys owner Jerry Jones told CNBC Thursday the decision to trade Micah Parsons ultimately came down to simple math.
Jones appeared on CNBC’s “Closing Bell: Overtime” to talk about the Dallas Cowboys’ record $12.5 billion valuation as the team kicks off the 2025-2026 season.
On August 28, the Green Bay Packers signed Parsons to a four-year, $186 million contract extension, $136 million of which is guaranteed, according to Spotrac. The deal came after a months-long feud with the Cowboys over his contract and makes Parsons the highest-paid non-quarterback in NFL history, according to ESPN.
“If you look at what his numbers are in terms of his compensation over the next five years… and then you look at those draft picks that we got, and you look at what those numbers could pay to other players, you’ll see about five of maybe the very best players as you can get in the NFL, for what one gets in Micah,” Jones told CNBC’s Michael Ozanian Thursday.
Jones said it wasn’t personal, adding he likes the 26-year old defensive end and thinks he’s a great player.
“You know our game has availability issues. In other words, if you’re hurt, you don’t play. Well the odds of having more for that much compensation, the odds of getting more people playing on the field every game as opposed to having it all on one or two, it’s an opportunity for us,” Jones said. “It fits us right now.”
Micah Parsons #11 of the Dallas Cowboys celebrates after a play against the Washington Commanders during an NFL football game at AT&T Stadium on January 5, 2025 in Arlington, Texas.
Cooper Neill | Getty Images
Parsons, a four-time Pro Bowler, is in the final year of his rookie contract, worth about $24 million, according to Spotrac.
He has established himself as one of the top defensive players in the league, recording more than 12 sacks in each of the past four seasons.
“I’m proud for him, proud for Green Bay,” Jones said.
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