The Texas-based coffee and soft beverages group has reported a fifth consecutive year of revenue growth, led by product price increases and a strong fourth quarter for its coffee segment. However profits fell amid inflationary pressures
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Net sales for commercial coffee systems division increased 6% to $4.98bn | Photo credit: Keurig Dr Pepper
Keurig Dr Pepper (KDP) has credited the steady performance of its commercial coffee systems division, which generates 35% of group sales, as driving double-digit revenue growth in 2022.
Reporting on the 12 months ended 31 December 2022, the JAB Holding-backed coffee and soft beverages group said company-wide sales increased 11% to reach $14bn.
However, despite rising sales and price increases, KDP saw overall profits fall 10% to $2.6bn as a result of higher inflationary pressures on transportation, warehousing and labour.
Texas-based KDP said net sales for commercial coffee systems division increased 6% to $4.98bn, led by price increases and $1.5bn fourth quarter revenues.
Despite a post-pandemic deceleration in home coffee machine sales, the coffee and soft beverages group said 38 million US households now own a Keurig brewing system, two million more than in 2021 and 10 million more than in 2018.
Additionally, retail consumption of single-serve pods manufactured by KDP, which includes Gloria Jean’s Coffees, Panera Bread and Tully’s Coffee branded coffee products, increased 5% in IRi tracked channels.
KDP is forecasting 5% sales growth in 2023 as the “relationship between pricing and inflation” improves.
“We accelerated our revenue growth for the fifth consecutive year, delivering 12% growth in the fourth quarter and 11% growth for the full year. Continued brand strength across our portfolio enabled modest elasticities in an environment marked by significant pricing. As we look to 2023, we expect mid-single-digit revenue growth, as the rate of pricing moderates, and enhanced gross margins, as the relationship between inflation and pricing improves,” said Bob Gamgort, CEO, Keurig Dr Pepper.
KDP reappointed Bob Gamgort as company CEO in November 2022 following the departure of Ozan Dokmecioglu due to violations of the company's Code of Conduct.
The coffee and soft beverages group was formed in July 2018 after Luxembourg-based conglomerate JAB Holding Company acquired US soft drinks manufacturer and distributor Dr Pepper Snapple and merged it with its Keurig Green Mountain coffee business in a deal worth $18.7bn.