Robust European sales and a strong performance from its Peet’s Coffee business offset the impact of high inflation, falling Asia Pacific revenues and the reorganisation of its operations in Russia
JDE Peet’s has reported modest group sales growth last year driven by stronger revenues in Europe and its US-based Peet’s Coffee business, but saw its margins squeezed due to high inflation and the reorganisation of its operations in Russia.
The JAB Holding-backed coffee group achieved 0.5% sales growth in the 12 months ending 31 December 2023 to reach €8.2bn ($8.8bn), with adjusted EBIT up 1% to €1.1bn ($1.2bn).
Its European segment, which accounts for more than 70% of total revenues, achieved 4% sales growth to €4.7bn ($5.1bn), driven by an average 6% price increase and strong performances in France, Switzerland and most eastern European markets.
Peet’s Coffee posted 1% sales growth in 2023 to reach €1.1bn ($1.2bn), which it attributed to increased ticket price across its 400 stores across the US, China and the Middle East, as well as strong consumer packaged goods (CPG) sales.
However, the business reported a 7% fall in LARMEA (Latin America, Russia, Middle East and Africa) sales to €1.5bn ($1.6bn) alongside a 3% decline in Asia Pacific to €791m ($856m).
In LARMEA, JDE Peet’s said an otherwise strong performance was offset by €185m ($203m) costs associated with the removal of its global coffee and tea brands from Russia and their replacement with locally manufactured brands.
JDE Peet’s CEO Fabien Simon said 2023 ‘clearly marked an inflection point’ for the business, having withstood persistent high inflation to record its strongest organic semester since going public in 2020.
“We concluded 2023 with a very strong second semester, marked by an acceleration of JDE Peet’s organic top line and adjusted EBIT growth. We are back to our long-term profitability algorithm, excluding Russia's performance,” said Fabien Simon, CEO, JDE Peet’s.
The Amsterdam-based coffee group forecasts organic sales growth of up to 5% in 2024.
JDE Peet’s also reported significant progress in its efforts to responsibly source 100% of its green coffee by 2025, reaching 83.8% – compared to 77% in 2022. The business has worked with nearly 700,100 smallholder farmers since 2015.
In January 2024, JDE Peet’s completed its acquisition of Brazilian coffee and tea business Maratá’s for an undisclosed sum. The coffee group also agreed a $260m global licensing agreement with Caribou Coffee and signed a coffee pod manufacture and distribution deal with UK-based Costa Coffee this year.
