Cold beverages drive Keurig Dr Pepper’s growth in FY 2021 but higher costs dent outlook 

USA – A thirst for Keurig Dr Pepper’s cold beverage portfolio drove overall sales at the Plano-Texas-based company in 2021.  

Full-year net sales rose 9.2% to US$12.68 billion with the coffee systems units delivering sales of US$4.72 billion – a 6.4% increase on the previous year.  

With demand for cold beverages rising, the owner of Snapple and Dr Pepper brands reported a market share growth in nearly 75% of the Company’s cold beverage retail base. 

The company also reports having added nearly three million new U.S. households to the Keurig system, bringing total Keurig households to almost 36 million. 

Its packaged beverages also saw a 9.7% increase in full-year net sales to US$5.88 billion, compared with US$5.36 billion in 2020. 

Meanwhile, KDP’s beverage concentrates unit saw its full-year net sales rise by 12.2% to US$1.49 billion, driven by increased marketing investments and the foodservice market improving, as consumers were able to dine out more in restaurants and other hospitality locations. 

The company’s Latin America beverages unit witnessed a significant increase in its full-year net sales of 20.5% to US$599 million, with brands Peñafiel and Clamato leading the strong performance. 

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The company’s fourth-quarter net sales rose by 8.7% to US$3.39 billion, compared with the US$3.12 billion recorded the previous year.  

This increase reflected the company’s growth in packaged beverages, beverage concentrates and Latin America beverages. 

The unit’s fourth-quarter net sales grew 17.1%, due to “continued strong in-market execution and market share expansion across the portfolio”. 

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Brands Canada Dry, Dr Pepper, Sunkist, A&W, 7UP and Squirt CSDs, Mott’s and Snapple led the Q4 net sales performance, according to the beverage maker.  

Polar seltzers, Core Hydration, Vita Coco, Clamato, Yoo-Hoo and Bai also boosted KDP’s growth in the quarter.   

“We finished 2021 with exceptional top-line momentum, driven by robust consumer demand across our portfolio and our third consecutive year of double-digit adjusted EPS growth,” commented chairman and CEO, Bob Gamgort. 

“Despite ongoing macro and Covid-related challenges, we successfully delivered our merger commitments on or ahead of the targets we set four years ago.” 

Despite KDP’s strong performance, shares of the company tumbled by 4.9% during the results as investors narrowed their focus to cost headwinds that led to a drop in operating income from a year ago 

Like other beverage manufacturers, KDP is expected to continue grappling with broad-based inflation and significant supply chain disruption across manufacturing, logistics, material inputs and labor availability. 

Also impacting the year-over-year comparison was increased marketing investment and the unfavorable year-over-year impact of items affecting comparability. 

KDP is however confident of navigating the crisis and has maintained the company’s 2022 guidance.  

“We head into 2022 with confidence in the stronger, faster-growing business we have built, poised to continue to drive outsized long-term value creation in an environment that we expect to remain challenging for some time,” Gamgort added.  

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