More expensive coffee weighs on profits at JDE Peet’s

Coffee empire JDE Peet’s, the parent company of Douwe Egberts and Jacobs, has not had the best of years in 2022. The company sold less coffee last year, and could not pass on all cost increases despite sharp price hikes. There were also conflicts with retailers in some European countries.

Discussions on price increases

Turnover at JDE Peet’s rose 16.4 % last year, to 8.2 billion euros. This growth was entirely due to higher prices, as the volume sold fell by 4.5 %. The coffee producer was forced to pass on sharply increased production costs to customers, but did not fully succeed, resulting in a 5.9 % drop in operating profit.

Consumers are drinking less coffee at home due to the lifting of lockdowns, while the huge increased price of coffee also weighs on consumption. Moreover, JDE Peet’s brands temporarily disappeared from the shelves at supermarket chains in Germany, France and the United Kingdom following discussions about price increases. As a result, volumes in Europe fell by 12.7 %.

In the Netherlands, JDE Peet’s is currently embroiled in a social conflict: employees at its factories in Utrecht and Joure are demanding a wage increase and are on strike for three days this week, from Wednesday to Friday.