The Luxembourg-headquartered investment firm reports on a decade of investments that have transformed the company into one of the largest fast-casual and retail packaged coffee businesses in the world
A JDE Peet's press photo | Photo credit: JDE Peet's
JAB Holding has outlined the scale of its investments in coffee and hospitality businesses over the last decade. Writing in a ten-year investment letter, Olivier Goudet Managing Partner & CEO, JAB Holding, said the investments had played a pivotal role in transforming JAB into a company focused on the global consumer sector.
The document shows that JAB’s coffee and hospitality brands now comprise nearly 70% of the firm’s $34bn investment portfolio, representing more than $23bn in assets.
Infographic: Major global coffee M&A 2010-2019
JAB described its JDE Peet’s
business as the ‘cornerstone’ of its coffee and beverages platform, having grown into the world’s largest pure-play coffee company following more than 15 acquisitions and partnerships since 2012. JAB said JDE Peet’s sells 140 billion cups of coffee annually, representing over 11% of the global coffee market.
Meanwhile, JAB said its Keurig Dr Pepper
(KDP) retail packaged coffee and beverages business had delivered ‘unparalleled resilience and solid growth’, delivering more than double returns on a $17bn investment four years ago.
Pret A Manger, which JAB acquired in late 2018, had been the company most impacted by the pandemic, the firm said, with 94% of the businesses’ stores closed at the depth of the crisis.
Despite the challenges, JAB said it took a long-term view of the business and hailed Pret for executing the ‘most impressive transformation we have seen during the pandemic’, moving from zero to 40% digital transactions, introducing multi-channel offers, expanding partnering and franchising, and introducing its coffee subscription programme.
Sharing coffee subscription knowledge between Panera Bread to Pret led to a ‘massive business transformation’, JAB added. Meanwhile, retrofitting acquisitions within JDE Peets enabled the gathering of best practices across different brands and markets, the investment firm added.
JAB also highlighted the progress of its Krispy Kreme
business, which it described as ‘a great brand that had lost its way’. New leadership had, however, enabled the US donut and coffee chain to achieve more than 40 billion unpaid social media impressions in 2021, while doubling returns on equity in less than five years.
However, issuing caution on the state of the global economy, Goudet said JAB expected to the inflation trend, fuelled by rising energy, commodity and labour costs increases, to continue and reach ‘levels not seen since the 1970s’.
Goudet also said JAB’s Alfred Landecker Foundation was directly supporting the evacuation of Ukrainian families and children following Russia’s invasion of the country that had ‘shocked the world’.
World Coffee Portal research
shows JAB Holding is the third-largest branded coffee chain business in the US. Combined, Starbucks
and JAB control a near 80% share of the US branded coffee shop market.