Lower-than-expected demand for coffee products at the start of the quarter hindered sales and led to weaker than projected adjusted income
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Arkansas-based Westrock Coffee posted a 5% fall in sales to $219.6m | Photo credit: Westrock Coffee
Westrock Coffee has reported an unexpected fall in third quarter sales following lower demand for its coffee products.
The Arkansas-based coffee roaster and beverage group posted a 5% fall in sales to $219.6m and a 35% decline in adjusted EBITDA to $11.6m.
However, net income for the period ending 30 September 2023 increased 26% to $16.6m.
CEO Scott Ford said the business experienced a ‘rapid fall off’ in coffee volumes in July and August 2023, although they have since stabilised.
“Our third quarter performance was a mix of positives and negatives, the most important, unfortunately, being the rapid fall off in volume demand for our traditional roast and ground coffee products during the early part of the quarter, which drove weaker than projected adjusted EBITDA results for the period,” he said.
Westrock Coffee expects to be less reliant on packaged wholebean and ground coffee sales in 2024, with the company’s new extract and ready-to-drink (RTD) facility scheduled to begin production in the second quarter.
Once fully operational, the 524,000sq ft facility will be the largest roasting to RTD operation of its kind and will enable Westrock to expand the development, production, and distribution of coffee, tea, and RTD products.