Strategic agreement will see JDE Peet’s support J.M. Smucker’s US out-of-home coffee business across product development, production and foodservice innovation
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A J.M. Smucker facility in Ontario, Canada
JDE Peet’s and The J.M. Smucker Co have announced a strategic partnership that will see the coffee giants collaborate in the US out-of-home coffee market. The agreement will see JAB Holdings-controlled JDE Peet’s support J.M. Smucker’s out-of-home liquid coffee business across product development, production and foodservice equipment innovation.
According to JDE Peet’s, the agreement will enable both companies to “aggressively pursue” liquid coffee innovation and sales growth across a range of out-of-home settings, such as hospitals, universities, hotels and conference centres.
A joint press release also saud J.M. Smucker plans to close its production facility in Virginia, USA, in 2022, a decision that is ‘related’ to the new partnership.
“We are excited by the promise this partnership holds for our away-from-home liquid coffee business,” said John Brase, Chief Operating Officer, The J.M. Smucker Co.
The agreement indicates both companies are anticipating a rebound of out-of-home trade following months of significant disruption to foodservice sales due to the Covid-19 pandemic.
In March 2021, JDE Peet’s reported a 4.2% sales decline in 2020 due to severe disruption. While the losses were partially offset by an increase in home coffee consumption, out-of-home sales for coffee products typically consumed in cafés, offices and education campuses, fell 32% to €666m ($789m), the company said.
The J.M. Smucker Co, which controls the Folgers coffee brand, and produces snacks and pet food, reported a 1% increase in revenues to $7.8bn in 2020. In the three months to January 31 2021, the company reported retail coffee sales rose 12% to $625.9m. Meanwhile, sales at its international and out-of-home business decreased 13% to $34.1m during the period.