From farmers to consumers, JDE Peet’s strives to champion an inclusive and regenerative ecosystem through its Common Grounds Programme which is comprised of three pillars: Responsible Sourcing, Minimising Footprint and Connecting People.

This recognition, based on the company’s improved CSA score, underscores JDE Peet’s’ longstanding commitment to creating a sustainable future.

Fabien Simon, CEO of JDE Peet’s, commented, “Three years ago, we engaged in a turnaround, which led us to rediscover the power of our brands. While we stepped up investments, execution and innovation, we brought back relevance for our consumers and our customers. Sustainability is playing an important role to enable relevance, as we became committed to foster an inclusive ecosystem. I am very proud of the progress we have made on our sustainability journey, in parallel with transforming the operational performance of JDE Peet’s. We acknowledge there is much more to do in order to reach 100% responsibly sourced coffee by 2025 and meeting our net-zero carbon emission target by 2050. Yet, we are greatly encouraged by the external recognition of the leading position of JDE Peet’s, which is the only coffee company included in the prestigious Dow Jones Sustainability Europe Index. We remain committed to continually improve our performance to deliver sustainable value for all our stakeholders and secure the future of coffee and tea.”

JDE Peet’s also performed particularly well in the fields of Emissions, Resource Efficiency & Circularity, Waste Management, Human Capital Development, Talent Attraction & Retention and Cybersecurity & System Availability.

Laurent Sagarra, VP of sustainability at JDE Peet’s, commented, “Sustainability is a journey, where every step counts. Over the past years we’ve stepped up from being directly involved at origin in over 60 farmer projects to actively playing our part in reducing scope 1,2 and 3 emissions. While we recognise that there’s still a long road ahead, I’m very proud of the positive impact we are already having around the world to improve the lives of nearly 600,000 smallholder farmers.”

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Maratá’s coffee & tea business is predominantly present in the northern part of Brazil through its longstanding and well-known brands Café Maratá and Chá Maratá. The acquisition complements JDE Peet’s’ existing portfolio of brands predominantly sold in the southern regions of Brazil, and increases the company’s scale and national coverage in Brazil, a market which offers compelling prospects for both volume and value growth. As a result, the acquisition offers long-term value creation potential through attractive revenue and cost synergies.

Fabien Simon, CEO of JDE Peet’s, commented, “We are delighted to welcome Maratá’s coffee & tea organisation to JDE Peet’s. Maratá’s portfolio and geographical presence are highly complementary to our existing franchise in Brazil. Together, we will serve more cups across a full range of price points and product offerings while expanding our regional presence in Brazil, one of the world’s largest coffee markets.”

José Augusto Vieira, founder of JAV Group, added, “I am very proud of the strong and successful coffee & tea platform we have built, and I am very pleased that by joining JDE Peet’s, the world’s leading pure-play coffee & tea company, we have secured the long-term development and success of this great business.”

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In-Home sales increased organically by 2.2% and in Away-from-Home by 9.0%, resulting in a four-year organic CAGR of 6.7% for In-Home sales and 0.6% for Away-from-Home sales.

Total adjusted EBIT decreased organically by 3.0% to EUR €581 million as an increase in gross profit was offset by an increase in SG&A. Including the effects of foreign exchange and scope changes, adjusted EBIT decreased by 7.9%. Underlying profit – excluding all adjusting items net of tax – decreased by 21.4% to EUR €411 million. This performance was mainly driven by an unfavourable impact from fair value changes in derivatives and forex and a lower level of operating profit and includes an underlying effective tax rate of 23.5%.

Net leverage of 2.8x net debt to adjusted EBITDA at the end of H1 23 was kept well below 3.0x, with a net debt of EUR €4.2 billion at the end of H1 23. Free cash flow was EUR €14 million in the first half of 2023, which was lower than the comparative period in 2022 due primarily to the normalisation of working capital as well as higher capital expenditures. JDE Peet’s’ liquidity position remains strong, with total liquidity of EUR 2.2 billion consisting of a cash position of EUR €0.7 billion (excluding restricted cash) and available committed RCF facilities of EUR 1.5 billion.

Commenting on the results, Fabien Simon, CEO of JDE Peet’s, said, “In the first half of 2023, we delivered resilient financial performance in a category that is globally adjusting in the aftermath of the pandemic, and coping with persistent inflation. Against this backdrop and despite an industry volume decline in Europe, we delivered mid-single-digit top-line growth, driven by our premium product portfolio, E-commerce acceleration and strong performance in the US and in emerging markets.”

In the first half of 2023, JDE Peet’s initiated the transition of an omni-channel organisation in Europe, and towards a local portfolio in Russia. Simon said the company will increase its global consumer reach, with the intended acquisition of Maratá’s coffee and tea platform in Brazil and the launch of L’OR Barista in the US. “While anticipating an acceleration of our organic sales growth in H2, we expect the business environment to remain volatile,” he said. “As there is uncertainty of the impact of the transition from international brands to local brands in Russia, we believe it is more appropriate to guide our full year organic adjusted EBIT growth in the range of a low single-digit increase and low single-digit decrease.”

In the first half of 2023, JDE Peet’s said it has made good progress against its strategic sustainability roadmap and multi-year objectives, with its long-term sustainability agenda is now deeply embedded across the entire organisation and in its strategic decision making. The carbon accounting system has been rolled out and enables the company to track its carbon footprint up to the individual SKU level and allows to have a full view of its carbon reduction performance alongside financial performance.

During the first half of 2023, JDE Peet’s announced its intention to launch a new, fully compostable coffee capsule and a new paper pack for our soluble coffee ranges, which is recyclable and is the first of its kind in the coffee market. The company said the coffee from this new paper pack will generate the lowest carbon footprint within its existing range of products.

In addition, JDE Peet’s has become a member of the ILO Child Labour Platform, to tackle the root causes of child labour in the coffee supply chain, and it published its Water Stewardship Policy and its Nutrition Policy.

Since the start of the war in Ukraine, JDE Peet’s has sought to ensure that its business in Russia is operated as a stand-alone business to the greatest extent possible. The company has now taken the next step by transitioning to a local portfolio of brands, which resulted in a non-cash impairment of EUR €185 million of the Jacobs brand in H1 23 and is expected to lead to meaningfully lower contribution from Russia in H2 23.

JDE Peet’s expects the business environment to remain volatile and vulnerable for the remainder of 2023. As there is uncertainty on the impact of the transition from international brands to local brands in Russia, the company now expects to deliver the following for full-year 2023:
• Organic sales growth at the high end of its medium-term range of 3 – 5% (unchanged)
• Adjusted EBIT to fall within the range of a low single-digit organic increase and a low single-digit organic decline (updated)
• Net leverage below 3.0x, with Free Cash Flow of around EUR 400 million, post normalisation of working capital, confirming an ongoing run-rate of EUR 1 bn on a 3-yr average (additional)
•A stable dividend (unchanged)

Total reported H2 2023 sales increased by 2.4% to EUR €3.988 million. Excluding a -1.6% effect related to foreign exchange and 0.4% related to scope and other changes, total sales increased by 3.5% on an organic basis, with 3 out of 4 segments growing between 5% and 10% organically. Organic sales growth reflects a price effect of 6.8% and a volume/mix effect of -3.3%. In-Home sales increased organically by 2.2% and in Away-from-Home by 9.0%, resulting in a 4-yr organic CAGR of 6.7% for In-Home sales and 0.6% for Away-from-Home sales.

Total adjusted EBIT decreased organically by 3.0% to EUR 581 million as an increase in gross profit was offset by an increase in SG&A. Including the effects of foreign exchange and scope changes, adjusted EBIT decreased by 7.9%.

H2 2023 Financial Review by Segment
Europe delivered a sequential improvement versus H2 22, although slower than originally anticipated. Organic sales growth of 0.3% was driven by an increase in price of 8.9% and a decrease in volume/mix of 8.6%, as positive volume/mix performance in the Away-from-Home business was more than offset by a volume/mix decline in the CPG business.

Notable strong performance was delivered by countries such as France, Switzerland and most Eastern European markets and brands including L’OR, Kenco and Pickwick. Reported sales decreased by 0.2% to EUR €2.268 million, including a net effect of -0.4% from foreign exchange and changes in scope/other. Adjusted EBIT decreased organically by 8.4% to EUR €476 million in H1 23, due to lower volumes, inflationary pressure, and due to an increase in advertising spend. Based on a 4-yr CAGR, the organic adjusted EBIT growth was -4.4%.

LARMEA: Organic sales growth of 10.0% was driven by an increase of 7.0% in volume/mix and 3.0% price. Volume/mix performance continued to be broad-based across most geographies, product portfolio and price points, with notable strong performance delivered by countries such as Ukraine, Morocco and Mexico. Reported sales increased by 5.6% to EUR €734 million, including a net effect of -4.5% from foreign exchange and changes in scope/other. Adjusted EBIT increased organically by 17.4% to EUR €125 million in H1 23. Based on a 4-yr CAGR, the organic adjusted EBIT growth was 19.1%.

Peet’s Organic sales growth of 8.6% was driven by an increase of 5.0% in price and 3.5% in volume/mix. Same stores sales and ticket size were up in Peet’s’ US coffee retail stores, and Peet’s CPG business continued to deliver competitive growth. Reported sales increased by 9.8% to EUR €576 million, which included a positive foreign exchange effect of 1.3%. Adjusted EBIT increased organically by 10.1% to EUR €67 million. Based on a 4-yr CAGR, the organic adjusted EBIT growth was 10.3%.

APAC: Organic sales growth of 4.7% was driven by an increase of 4.5% in price and 0.3% in volume/mix. Positive volume/mix and organic sales growth performance in most CPG businesses was partly offset by relatively soft performance in select Away-from-Home businesses. Sales performance was geographically broad-based and supported by strong brand performance from brands including Campos, Moccona and Super. Reported sales increased by 1.8% to EUR €397 million, including a foreign exchange effect of -2.9%. Adjusted EBIT decreased organically by 21.6% to EUR €51 million in H1 23, primarily impacted by one-off costs related to a temporary supply chain disruption connected to one of our main manufacturing facilities in the region. Based on a 4-yr CAGR, the organic adjusted EBIT growth was 4.7%.

Summing up JDE Peet’s H2 2023 and looking ahead, Simon said, “We continue to be guided by our renewed strategic framework to become more global, more digital and more sustainable. We are now very pleased to witness the in-market outperformance of JDE Peet’s globally from the disciplined execution of our strategic priorities.”

For the full and original version of the press release click here.

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Maratá’s coffee and tea business is predominantly present in the northern part of Brazil through its longstanding and well-known brands Café Maratá and Chá Maratá. The business employs around 1,200 employees, operates two manufacturing plants and sells its products through a dense and well-established distribution network.

Upon completion, the acquisition will complement JDE Peet’s’ existing portfolio of brands primarily sold in the southern regions of Brazil. The acquisition will increase JDE Peet’s’ scale and national coverage in Brazil, a market which offers compelling prospects for both volume and value growth. As a result, the acquisition offers long-term value creation potential through attractive revenue and cost synergies.

Commenting on the acquisition, Fabien Simon, CEO of JDE Peet’s, said, “Over the last three years, we have been focused on transforming JDE Peet’s into a faster growing, correctly invested, and more sustainable company. We are now ready to take the next step and continue our disciplined path of geographical expansion and diversification. I am therefore very pleased with the opportunity to buy Maratá’s well-run coffee and tea platform in Brazil, an attractive market we know well and where we have successfully made acquisitions in the past.” He noted that following its completion, “this acquisition will represent a highly complementary proposition to our existing business in Brazil, which has been building strong momentum in recent years, allowing us to serve more cups across a full range of price points and product offerings while expanding our regional presence in Brazil.”

José Augusto Vieira, founder of JAV Group, added, “Since Maratá was founded over 50 years ago, we have stayed true to our mission of providing innovative, socially responsible, and high-quality products to consumers across Brazil. I am very proud of the strong and successful coffee and tea platform we have built, and I am very pleased that by handing over our coffee and tea business to JDE Peet’s, the world’s leading pure-play coffee and tea company, we are securing the long-term development and success of this great business.”

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Commenting on the launch, Fabien Simon, JDE Peet’s CEO, said, “This is an important step in driving the sustainability agenda of our company and yet another sign of our leadership in innovation. We know that reducing packaging and promoting recyclability and reusability are increasing consumer needs. By providing more sustainable solutions within soluble coffee, one of the world’s most beloved and consumed beverages, we can maximise our positive contribution in decarbonising our own portfolios and the coffee market as a whole.” 

JDE Peet’s is working to reduce the amount of packaging material and associated carbon emissions, used in both manufacturing, transport, and end-of-life disposal. This new paper pack directly supports the company’s effort of minimising its carbon footprint across its entire value chain and its goal of moving towards 100% of packaging designed to be reusable, recyclable, or compostable by 2030. In line with this, in 2022, JDE Peet’s set targets validated by the Science Based Targets initiative (SBTi) to reduce emissions across scopes 1, 2 and 3. 

The new range will be available in selected markets across multiple brands of JDE Peet’s’ portfolio as of 2024. 

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This proposed organisational change will enable the European markets to apply a true omnichannel approach, a model the company successfully applies in all its other markets. Additionally, it will allow the company to leverage its brands more effectively and reduce complexity.

Commenting on the announcement, Fabien Simon, CEO of JDE Peet’s, said, “Over the last couple of years, we have successfully implemented various initiatives that have strengthened the foundations and improved the performance of our Out-of-Home business. However, we operate in a dynamic environment, and how our customers and consumers engage with us, buy our products, and use our services continues to structurally evolve. Combining our Out-of-Home and CPG Europe segments will allow us to better leverage our brand power and unlock value.”

If these proposed changes are effectuated, JDE Peet’s will align its segment reporting with the new organisational model. The reporting of the other segments and the total company is not subject to change. The proposed changes described above are subject to information and/or consultation as applicable regulations require.

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In 2021, Peet’s Coffee, the US subsidiary of JDE Peet’s, reached 100% responsibly sourced coffee through its partnership with Enveritas, a non-government organisation that has developed a new, data-driven approach to sustainability assurance. Enveritas offers a different way of addressing sustainability – an approach where producers access free verification of their practices, while encouraging a deeper understanding and commitment to solving the most challenging sustainability issues. To date, Enveritas has verified more than 200,000 coffee farms around the world against a complete set of sustainability standards. JDE Peet’s will now leverage the partnership with Enveritas across its broader coffee supply chain, allowing it to reach its ambition of 100% responsibly sourced coffee by 2025.

“JDE Peet’s is deeply committed to creating a sustainable future for the customers and consumers we serve while creating long-term value for the business and our stakeholders,” said Fabien Simon, CEO of JDE Peet’s. “Being the world’s leading pure-play coffee and tea company comes with great responsibility to ensure the resilience of the global coffee supply, in an authentic, inclusive and regenerative way. With this partnership and increased investments, we are elevating industry standards, and are committed to play our part to create a better future for our farmers, their families and the entire coffee ecosystem.”

These announcements form an integral part of JDE Peet’s’ Sustainability programme, which aims to partner with suppliers, NGOs, and others to address key sustainability challenges in the countries from which JDE Peet’s sources its coffee, tea and other agricultural ingredients. Through this programme, the company has already reached over 470,000 smallholder farmers with more than 50 collaborative projects across 18 countries since 2015.

“We touch all stages of the coffee and tea ecosystem, from farmers to consumers, and therefore have an obligation to develop both near- and long-term solutions to protect the world we live in,” said Laurent Sagarra, global quality and sustainability director of JDE Peet’s. “Setting this ambitious target is part of our journey to lead the way in creating a more sustainable future.”

Today’s announcement follows the company’s recent commitments to SBTi-approved greenhouse gas emission reduction targets across its value chain. To learn more about JDE Peet’s’ sustainability journey, please visit jdepeets.com/sustainability.

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“JDE Peet’s is deeply committed to an inclusive growth model. Today’s announcement of our GHG emissions targets formalises our commitment to climate action, a key focal point within our sustainability journey, while creating long-term value for the business and our stakeholders,” said Fabien Simon, CEO JDE Peet’s.

“In addition, we are committed to reviewing these targets within the next five years and assessing the potential to further enhance our goals to a 1.5°C trajectory on the way to reaching net zero GHG emissions across our full value chain by 2050.”

JDE Peet’s’ approach to sustainability is focused on building collaborative partnerships and prioritising areas where it has the greatest potential impact, the company says. Its end-to-end approach to reduce GHG emissions across its value chain focuses on two key areas:

Minimising operational footprint:

• Further increase the efficiency of resources across JDE Peet’s global manufacturing network;
• Continue to grow the share of renewable electricity throughout business operations;
• Replace fossil fuels with green alternatives wherever feasible, such as using spent coffee grounds as fuel in operations.

Addressing the footprint of the value chain:

• Work towards 100% responsibly sourced coffee, tea, and palm oil by 2025 through its Common Grounds programme;
• Minimise the environmental impact of JDE Peet’s packaging by reducing the amount of packaging it needs, designing its packaging to be reusable, recyclable or compostable, and increasing the share of recycled packaging post life-cycle;
• Explore low-carbon logistics options for our inbound and outbound transport across the value chain.

To learn more about JDE Peet’s’ sustainability journey, visit the company’s website.

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