The US coffee roaster said it is well positioned to scale RTD production and continue strong sales growth into 2023, despite higher production and labour costs contributing to a $55m loss last year
Westrock Coffee achieved net sales growth of 24% in 2022 to reach $868m | Photo credit: Westrock Coffee
Arkansas-based Westrock Coffee has reported ‘record annual results’ for 2022 as it seeks to scale its ready-to-drink (RTD) capabilities over the next year.
The coffee roaster achieved net sales growth of 24% in the 12 months ended 31 December 2022 to reach $868m alongside 27% growth in adjusted EBITDA to $60m.
However, Westrock reported a $55m net loss for 2022, compared to a $21.3m loss in 2021.
Chief Financial Officer Chris Pledger said on a call with investors that cost increases and equipment delays negatively impacted profits in 2022.
“It took longer and cost more, in terms of equipment, labour and materials, to absorb the 50% year-over-year growth in our single-serve cup orders,” he said.
The coffee roaster also cited acquisition and restructuring costs, which totalled approximately $13m, as contributing to its higher loss.
In February 2023 Westrock Coffee acquired California-based coffee roaster Bixby Roasting Co. to enhance its omni-channel marketing and tap into the under-30s market for specialty coffee.
Westrock has also increased its focus on RTD coffee as it seeks to track ‘shifting consumer trends’.
In November 2022 the company began upgrading its new roasting to 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 is also building a new distribution facility in tandem with the manufacturing plant to improve the reach and efficiency of its coffee, tea, and RTD product distribution.
“I am very grateful to the team for their near heroic efforts that delivered record annual results, even as they dealt with the damaging macroeconomic challenges of an inflation surge and record gasoline prices. As we turn to 2023 with the requisite equipment to meet our legacy customers’ demands now operational, we are focused on continuing to scale our existing capabilities in service to our customers. Among our top priorities is delivering our Conway, Arkansas extract and ready-to-drink facility on time and on budget, the benefits of which will be material to our business,” said Scott T. Ford, CEO, Westrock Coffee.
Westrock Coffee currently operates eight production sites globally, providing more than 20 million cups of coffee a day. With offices in 10 countries, the company sources coffee and tea from 35 origin countries.