Keurig Dr Pepper (KDP) recorded a 49% increase in 2019 net sales to $11.12 billion, primarily reflecting the impact of the merger in 2018.
The report reveals the company’s second full fiscal year results since the merger between Keurig Green Mountain and Dr Pepper Snapple Group.
Chairman and CEO of KDP, Bob Gamgort, said: “We also delivered financial results that have exceeded our three-year targets invested in the foundation for long-term sustainable growth and have upped our game on corporate responsibility and sustainability.”
KDP’s underlying net sales, meanwhile, grew by 3.2% compared to last year thanks to strong performance in key categories such as its carbonated soft drinks (CSDs) and single-serve coffee pods.
Net income more than doubled to $1.25 billion in 2019 compared to $0.59 billion in 2018 – which represented a 31% decrease – and operating income increased 92% to $2.38 billion. Both figures were driven once again by the merger.
In the firm’s largest division, packaged beverages, adjusted pro forma net sales recorded a 2.4% decrease, with 2.3% growth in underlying net sales offset by unfavourable impact from changes in the Allied Brands portfolio.
Underlying net sales in packaged beverages, however, were driven by its brands Core, a premium water company acquired in 2018, Dr Pepper, Canada Dry and Snapple Juice drinks but offset by declines in Bai, 7UP and Snapple Tea.
In its coffee systems unit, sales growth increased by 2.8%, reflecting strong volume growth of its pods. This was driven by continued expansion of US households regularly using a Keurig brewer, which in 2019 grew approximately 7% to 30 million households.
In September last year, KDP launched a new line of coffee makers under the name K-Duo. Earlier today, KDP and Nestlé USA announced that they have signed a long-term agreement which will facilitate the continued production of Starbucks branded K-Cup pods in North America.
The company’s Q4 results reported a 4.3% increase in net sales thanks to strong performance of Dr Pepper and Canada Dry CSDs, Snapple Juice drinks and Motts apple sauce, as well as retail consumption of single-serve pods.
For 2020, KDP plans to increase its investments across the business in areas such as innovation, new partnerships, and research and development, which should fuel net sales growth to accelerate from 3% to 4%.
“We delivered strong performance for 2019, with underlying net sales growth in all four segments and EPS growth above our merger target range. In-market performance was healthy across our portfolio, as innovation, marketing and in-store execution drove share growth in key segments,” said Gamgort.
© FoodBev Media Ltd 2021
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