| US

KDP to focus on value-led products as US coffee sales fall

The US coffee and soft beverages group said investing in the affordable coffee pod category will be key to turning around ‘unsatisfactory’ 2023 coffee sales

Keurig Dr Pepper’s US coffee segment sales fell 5% to $4.1bn | Photo credit: via Shutterstock


Keurig Dr Pepper (KDP) will invest in its value-focused coffee pod offer this year to boost sales among mid and lower-income US consumers. 

The JAB Holding-backed coffee and soft beverages group posted 5% year-on-year net sales growth last year to reach $14.8bn, with adjusted net income rising 4% to $2.5bn. 

However, ‘sluggish’ at-home coffee consumption negatively impacted its 2023 US coffee segment sales – which fell 5% to $4.1bn. 

KDP’s coffee pod sales fell 3.6% in the 12 months ending 31 December 2023, while shipments of its coffee pod machines declined 10% year-on-year. 

During an investors call CEO Bob Gamgort said at-home coffee category consumption ‘is taking longer than anticipated to return to growth’, following a post-pandemic cooling of the market and the cost-of-living crisis. 

However, with more than 50 million coffee consuming households in the US not yet purchasing single-serve coffee, he said KDP had ‘significant runway to steadily grow penetration’. 

Gamgort said KDP will seek to gain share in the value-focused market segment by manufacturing new machines to ‘hit important entry-level price points’. Additionally, KDP is hoping to boost pod sales by highlighting the ‘relative value of consuming coffee-at-home' compared to visiting coffee shops. 

While Gamgort considers it important to remain attractive and competitive in the growing premium coffee pod segment – as highlighted by its recent retail and e-commerce distribution deal with Lavazza – he said emphasising affordability will support a broader at-home coffee recovery and return the single-serve category to its long-term growth trend. 

“We are not satisfied with our 2023 performance but are taking steps to support a stronger 2024. We are being open-minded and ambitious and positioning KDP to benefit from an at-home coffee category rebound, while also planning 2024 in a measured way,” Gamgort added. 

KDP operates a portfolio of more than 125 owned, licensed and partner brands, including the Starbucks, Krispy Kreme, Tully’s Coffee, Cinnabon and Tim Hortons coffee brands. 

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