Swiss Water has reported strong financial results for the first quarter of 2022, with a 50% increase in revenue to $38.4m driven by growth across its international markets – but rising commodity coffee costs are likely to result price increases, the company has indicated
Decaffeinated coffee company Swiss Water has reported a first quarter revenue increase of CA$ 12.7m | Photo credit: Swiss Water
Canadian decaffeinated coffee company Swiss Water has reported first quarter revenue of
CA$ 38.4m, an increase of 50% or $12.7m compared to the same period in 2021.
The company posted gross profit of $5.8m, an increase of $2.2m over the same period in 2021. Swiss Water said that the increase in gross profit was primarily driven by higher trading volumes, and the implementation of more efficient production capabilities.
The company’s first quarter results show that quarterly processing volumes increased by 23% compared to the same period last year, driven by a combination of new customer acquisition and organic growth with existing customers.
Swiss Water’s North American business growth, covering the US and Canada, accelerated with volumes up by 18% compared to the first quarter of 2021, whereas international markets also grew strongly with volumes up by 37%.
By dollar value, 43% of Swiss Water sales were to customers in the US, 33% were to international customers, and the remaining 24% were to Canada.
Although optimism remains in the company’s future outlook, Swiss Water specifies supply chain issues and increasing coffee prices as reasons for caution, with both concerns expected to lead to further pricing actions later this year.
Based in British Columbia, Swiss Water decaffeinates coffees without the use of chemicals, such as methylene chloride, a process that the company promotes is the world’s only third-party 100% chemical-free water process for coffee decaffeination.
“As we look forward through the balance of 2022, we are continuing to see a strong order book and are optimistic that, despite emerging macroeconomic risks, we will continue to see favourable trading conditions in our key markets. On a more cautionary note, we are continuing to experience delays in coffee deliveries as supply chain bottlenecks persist. Furthermore, the continuation of very high coffee futures prices has resulted in a significant increase in our working capital and liquidity needs. We will pay close attention to these emerging risks and increasing costs, and expect that further pricing actions and other mitigation efforts will likely be required,” said Frank Dennis, President and CEO, Swiss Water.
Responding to the growth in decaf and an increase in consumers seeking out transparent, natural options, Peet’s Coffee announced in January that it had converted all of its decaffeinated bean and K-cup pods to water process methods, with Swiss Water a key selected supplier.
Swiss Water also owns Seaforth Supply Chain Solutions Inc., a green coffee handling and storage business.