US – Leading producer and distributor of hot and cold beverages Keurig Dr Pepper (KDP) is confident of a successful 2021 after it net sales jumped 4.5% to $11.62 billion in 2020.
The company witnessed a strong finish to 2020, with its fourth-quarter net sales rising by 6.4% to US$3.12 billion, driven by market share gains across its portfolio and more households using the Keurig system.
Operating income stood at US$2.48 billion for the full-year, compared to US$2.38 billion last year, representing a 4.3% increase driven by strong sales.
In the year ended 31 December 2020, US households regularly using a Keurig brewer increased approximately 10% to 33 million households.
This translated to sales of the KDP coffee system unit amounting to US$4.43 billion, a 4.7% increase compared to the year prior.
For the company’s packaged beverages division, net sales rose 8.5% to US$5.36 billion, reflecting 8.2% volume growth.
The unit witnessed market share growth across the entire portfolio, with particular strength in carbonated soft drinks, premium unflavoured water and juice including its Dr Pepper, Canada Dry, 7UP, Snapple tea and Core brands.
Meanwhile, KDP’s beverage concentrates unit was weighed down by the negative impact of Covid-19 on the fountain foodservice business. Net sales fell 6.3% to US$1.33 billion.
KDP’s Latin America beverages witnessed its net sales drop by 5.9% to US$497 million due to unfavourable foreign currency translation and the impact of the pandemic on Mexico’s volumes.
“KDP again delivered on its annual financial commitments in 2020, capped by a strong fourth quarter with exceptional growth in net sales that was driven by market share gains across our portfolio and accelerated household adoption of the Keurig system,” Keurig Dr Pepper chairman and CEO, Bob Gamgort, said.
Justin Whitmore becomes Keurig Dr Pepper’s chief strategy officer
In another press statement, KDP announced that Justin Whitmore, a Tyson Foods executive, will become its chief strategy officer effective March 1.
He will join the executive leadership team and be responsible for enterprise strategy work, such as mergers, acquisitions and corporate partnerships, the U.S. beverage company announced.
Whitmore has a record of delivering transformative results and “we’re excited to welcome him,” Gamgort said in a statement.
Whitmore oversaw Tyson’s alternative proteins business and was previously executive vice president of corporate strategy and chief sustainability officer — a role that was given to John R. Tyson.
An optimistic 2021
After posting an impressive result for 2020 despite of the pandemic, KDP is optimistic that its 2021 report will be equally positive.
“While we expect 2021 to be another challenging and unpredictable year, we’re confident in our ability to deliver the final year of the merger commitments communicated in 2018,” Bob Gamgort, said.
In 2021, KDP expects to deliver another year of strong growth and exceed its three-year merger target of 2-3% average annual growth.
Analysts at CNBC are of the opinion that KDP has every right to be confident about the prospects of a strong 2021 financial year.
According to the analysts, the company’s coffee business received a jolt when office workers started working from home, forming habits that will stick around even after staffers return to their cubicles.
Keurig Dr Pepper also stands to gain from the return of demand to other parts of its business.
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