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Single serve pods boost Westrock Coffee’s third quarter revenues

The US coffee roaster says single-serve coffee products are outperforming its core coffee and tea business and has enhanced its ready-to-drink capacity with the acquisition of Kohana Coffee

Arkansas-based Westrock Coffee achieved third quarter sales growth of 27% to reach $230.3m | Photo credit: Westrock Coffee


 

Westrock Coffee has credited increased consumer demand for its single-serve coffee pod products as driving its third quarter revenues, and targets further growth for its expanding ready-to-drink (RTD) category. 
 

Reporting its results for the three months ended 30 September 2022, Arkansas-based Westrock Coffee achieved 27% sales growth to reach $230.3m.  


The improvement was driven by a volume increase in single serve coffee pods and underlying green coffee prices. 


Westrock Coffee had previously reported a 57% volume increase in single serve pods in its second quarter


However, the revenue increase was partially offset by a 9% fall in Westrock Coffee’s roast and ground coffee volumes. 


The company said rising inflation had caused consumer demand for its core coffee and tea products to fall while manufacturing costs increased.  


The coffee roaster also reported a 7% increase in gross profits during the period to $41.1m, but net loss grew to $13m from $3.9m in the same three months of 2021. 


“Our third quarter results again highlight the product mix shift we are seeing across our business. The year-over-year growth in our single serve cup volumes drove Adjusted EBITDA growth of 33% in the third quarter. We held higher expectations for our core coffee and tea business but that was obviously impacted by the negative effects of inflation as both our customer volume demand and our manufacturing costs reflected the rapid acceleration of price increases in fuel, food, materials, and labour,” said Scott T. Ford, CEO, Westrock Coffee. 


In November 2022 Westrock Coffee began upgrading its new roasting to ready-to-drink (RTD) facility in Conway, Arkansas. Once fully operational in 2024, the 524,000 square foot facility will be the largest roasting to RTD operation of its kind. 


Westrock Coffee has also further enhanced its RTD capabilities with the acquisition of US-based Kohana Coffee. Westrock Coffee said the deal would enable it to accelerate the development, production and distribution of RTD products in cans and multi-serve bottles to customers of both companies. 


The sum of the acquisition has not been disclosed but the company did confirm that Kohana Coffee owners Jonathan Reinemund and Steve Reinemund have become shareholders of Westrock Coffee. Steve Reinemund is a former CEO of PepsiCo, Inc. 


Westrock Coffee is one of the largest integrated coffee, tea, flavours, extracts, and ingredients solutions providers in the US. With offices in 10 countries, the company sources coffee and tea from 35 countries. 


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