The US drinks large posted an eighth consecutive quarter of declining espresso phase gross sales however stays optimistic its broad model portfolio can rebound in 2025
KDP’s fourth quarter espresso phase revenues fell 2.4% to $1.1bn | Picture credit score: through Shutterstock
Keurig Dr Pepper (KDP) stays ‘bullish’ on the prospects for its espresso manufacturers, regardless of posting one other quarter of declining gross sales for the phase, CEO Tim Cofer has mentioned.
The US espresso and tender drinks group achieved 3.6% complete income development for the 12 months ended 31 December 2024 to succeed in $15.3bn. Nevertheless, espresso phase gross sales fell 2.6% year-on-year to $4bn – underperforming towards respective 6% year-on-year income development for KDP’s tender drinks division, which posted gross sales of $9.3bn.
KDP’s fourth quarter espresso phase revenues fell 2.4% to $1.1bn – marking the class’s eighth consecutive quarter of gross sales decline.
Nevertheless, Cofer mentioned espresso stays a gorgeous class for KDP and that present inflationary pressures might generate alternatives on the reasonably priced and premium ends of the market.
“On this inflationary surroundings that we’ve transitioned into, there’s a chance for us to additional showcase the worth of at dwelling espresso relative to away from dwelling,” he mentioned throughout an earnings name with buyers.
In 2024, KDP added Utah-based Black Rifle Coffee Company and Canada’s Kicking Horse Coffee to its value-focused Okay-Cup portfolio, which incorporates distinguished manufacturers Caribou Coffee, Dunkin’, Krispy Kreme, Starbucks and Tim Hortons.
Moreover, KDP reported fourth quarter quantity development in its premium espresso phase – led by an expanded commercial partnership with Italian coffee roaster Lavazza. KDP is the unique sourcing accomplice and producer of premium Lavazza Okay-Cup pods in North America and assumed retail and e-commerce gross sales and distribution tasks for the model within the area in February 2024.
KDP can be in search of to ramp up distribution of premium La Colombe ready-to-drink (RTD) products over the following 12 months, constructing upon the strategic partnership with the US specialty espresso roaster and café group it signed in July 2023.
To offset headwinds from document espresso costs and inflation, KDP is in search of to additional penetrate workplace espresso, hospitality and foodservice channels in 2025 – segments the place it at the moment feels underrepresented.