Hot-drinks group JDE Peet’s wants to “simplify” its product portfolio with a focus on ten brands including L’Or and Jacobs.
The Netherlands-based group is also targeting €500m ($590.8m) in savings in its cost of goods sold and SG&A expenses.
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“JDE Peet’s is a fantastic company with strong foundations,” Rafa Oliveira, the CEO of JDE Peet’s, said today (1 July).
“As the world’s largest pure-play coffee company, we are uniquely positioned to capture the long-term opportunities this resilient and vibrant coffee category offers.”
In 2024, JDE Peet’s saw its sales and earnings rise but the company has faced criticism from analysts over some of its decisions, including moves to expand its coffee-machine business in the US. The JDE Peet’s share price fell by more than 30% in 2024.
In May, JDE Peet’s announced it had sold its tea business in Turkey to Efor Holding as part of efforts to “optimise resource allocation” and “simplify” operating models. The company also said it would discontinue the roll-out of its L’Or Barista machines in the US.
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By GlobalDataOliveira, who joined JDE Peet’s as CEO last November, outlined the group’s plans at an investor day today alongside CMO Ricard Barri Valentines and CFO Yang Xu.
The company has devised a new strategy it has dubbed Reignite the Amazing. Oliveira said the initiative is “brand-led and centred around three big bets: Peet’s, L’Or and a strategically selected set of ten iconic brands, led by Jacobs”.
He added: “Our new strategy provides a clear framework consisting of an ambitious and focused plan to unlock sustainable, profitable growth and drive strong cash generation by combining the scale and expertise of an industry leader with agility, creativity and the innovative mindset of a start-up.”
JDE Peet’s wants to simply its range, including by brand and product SKU. The company is aiming to extract half the targeted savings by the end of 2027.
Xu said around 35% of the €500m in savings would come from “portfolio simplification”, with 30% from “continuous improvement”, a quarter from “synergies by way of working” and around 10% from reviewing the company’s routes to market.
The JDE Peet’s finance chief said around 80% of the group’s gross profit came from 12 brands. Together, 33 brands generate less than 5% of the company’s gross profit, she said.
Around half the savings would be put into what JDE Peet’s calls “high-potential growth initiatives and selective high-impact capabilities” and the other half to “strengthen profitability”.
The expenditure on growth includes increasing spending on A&P and production capacity. The company is planning to spend €30-50m more a year on capital expenditure, it said.
In the period from 2026 to 2027, JDE Peet’s is targeting a 1-3% rise in gross profit compared to 2024, a growth rate it is aiming to accelerate to 4-7% in the period 2030 to 2032.
