The US beverages giant posted an eighth consecutive quarter of declining coffee segment sales but remains optimistic its broad brand portfolio can rebound in 2025
KDP’s fourth quarter coffee segment revenues fell 2.4% to $1.1bn | Photo credit: via Shutterstock
Keurig Dr Pepper (KDP) remains ‘bullish’ on the prospects for its coffee brands, despite posting another quarter of declining sales for the segment, CEO Tim Cofer has said.
The US coffee and soft beverages group achieved 3.6% total revenue growth for the 12 months ended 31 December 2024 to reach $15.3bn. However, coffee segment sales fell 2.6% year-on-year to $4bn – underperforming against respective 6% year-on-year revenue growth for KDP’s soft beverages division, which posted sales of $9.3bn.
KDP’s fourth quarter coffee segment revenues fell 2.4% to $1.1bn – marking the category’s eighth consecutive quarter of sales decline.
However, Cofer said coffee remains an attractive category for KDP and that current inflationary pressures could generate opportunities at the affordable and premium ends of the market.
“In this inflationary environment that we’ve transitioned into, there’s an opportunity for us to further showcase the value of at home coffee relative to away from home,” he said during an earnings call with investors.
In 2024, KDP added Utah-based Black Rifle Coffee Company and Canada’s Kicking Horse Coffee to its value-focused K-Cup portfolio, which includes prominent brands Caribou Coffee, Dunkin’, Krispy Kreme, Starbucks and Tim Hortons.
Additionally, KDP reported fourth quarter volume growth in its premium coffee segment – led by an expanded commercial partnership with Italian coffee roaster Lavazza. KDP is the exclusive sourcing partner and manufacturer of premium Lavazza K-Cup pods in North America and assumed retail and e-commerce sales and distribution responsibilities for the brand in the region in February 2024.
KDP is also seeking to ramp up distribution of premium La Colombe ready-to-drink (RTD) products over the next 12 months, building upon the strategic partnership with the US specialty coffee roaster and café group it signed in July 2023.
To offset headwinds from record coffee prices and inflation, KDP is seeking to further penetrate office coffee, hospitality and foodservice channels in 2025 – segments where it currently feels underrepresented.