Keurig Dr Pepper is set to acquire JDE Peet’s in a major coffee consolidation. Plus, experts say saving forests beats planting new trees on coffee farms, and Verve’s healthcare surcharge has both workers and customers irked.
‘Keurig Dr Pepper to Buy JDE Peet’s for $18 Billion in Revamp’ – via Bloomberg
After a decade of nonstop mergers in coffee, two of the biggest coffee companies—created by merging other smaller brands—are joining forces. On Monday, news broke that Keurig Dr Pepper (KDP) has agreed to acquire JDE Peet’s for $18 billion, uniting two giants who have been responsible for some of the coffee industry’s most high-profile acquisitions.
As Catherine Larkin and Katerina Petroff report for Bloomberg, the deal is being steered by investment firm JAB Holdings, which owns 69% of JDE Peet’s and nearly 5% of KDP. After the acquisition, KDP plans to split the consolidated mega-corporation into two parts, one focusing on coffee and the other on soft drinks.
Once the deal closes and restructuring wraps in 2026, KDP expects the resulting coffee behemoth, to be known as Global Coffee Co., to generate around $16 billion in annual sales. This will make it the second-largest coffee company in the world behind Nestlé, with control of more than 50 brands, including Green Mountain Coffee, Keurig, Peet’s Coffee, Stumptown, Intelligentsia, and many more.
For JAB, the benefits of this deal are obvious. The investment firm is set to emerge from the deal with more than $12 billion in cash, as it looks to divest from its coffee holdings. Shareholders, on the other hand, are split. JDE Peet’s stock climbed after the deal, and the company’s shareholders will receive a 20% premium over the August 22 closing price. On the other end, KDP’s stock price fell 18%, wiping $8 billion from its value.
JDE Peet’s, based in the Netherlands, controls several international coffee companies, including the Swedish brand Gevalia and Kenco, which is sold in the U.K. and Ireland. This expanded portfolio will give Global Coffee Co. a more global presence, Jon Cox of the financial services firm Kepler Cheuvreux told Reuters. “Rolling the two coffee businesses together makes sense, reducing the European-centric and commoditised nature of most of JDE Peet’s business, and giving Keurig international exposure,” Cox said.
Combining the two multinationals contributes to the ongoing consolidation of the coffee industry, while also offering competition to Nestlé. On LinkedIn, coffee consultant Gerd Mueller-Pfeiffer wrote that, “if executed well, this merger could finally create a coffee champion with the scale, reach, and focus to challenge Nestlé in more than just regional markets.”
“We are excited to join forces with Keurig to chart the future of global coffee by leveraging our combined portfolio of the world’s most beloved coffee brands,” said JDE Peet’s CEO Rafa Oliveira in a press release. “We are incredibly proud of the formidable global platform that we have built at JDE Peet’s and, together with Keurig, we are looking forward to powering a new era of coffee innovation and leadership.”
Read the full story on more coffee consolidation here or via Yahoo! Finance here.
‘Study Suggests Coffee Industry Has Been Incentivizing Carbon Storage All Wrong’ – via Daily Coffee News
The coffee industry has long embraced planting trees as a means to offset carbon emissions and to counterbalance expanding farmland. However, a new meta-analysis from the Smithsonian reveals that it is significantly more beneficial to leave existing forests intact than to plant new trees.
The research, published in the journal Communications Earth & Environment, looked at 67 studies from across Latin America, Africa, and Asia. It examined both farms using agroforestry systems—growing coffee within a forest or under a diverse canopy of shade trees—and full-sun monocultures without any shade.
As Nick Brown reports for Daily Coffee News, researchers found that clearing existing forests released twice as much carbon as tree planting could capture, even if every farm in the world planted new shade trees.
Researchers estimated that farms worldwide store 482 million metric tons of carbon in their coffee plants and shade trees. They then calculated that, even if every farm on earth planted additional shade trees, they would capture just 82–87 million extra tons. By comparison, cutting down and converting all agroforestry farms to monocultures could release 174–221 million metric tons of carbon into the atmosphere.
“Planting shade trees on monoculture coffee farms is a positive step, but our findings show tree planting alone can’t make up for what you lose when you remove mature shade trees,” said senior author Ruth Bennett from the Smithsonian’s National Zoo and Conservation Biology Institute in a press release.
Commercial carbon capture projects often prioritize fast-growing trees that maximize carbon capture in the first few years. However, the study found that doing so harms biodiversity. “To protect nature and fight climate change, coffee companies need to focus on planting a diversity of the right trees, not just planting a high density of fast-growing trees that capture carbon,” said co-author Emily Pappo.
The researchers recommend a carbon payment system that rewards protecting existing forests and, when new trees are planted, prioritizes diverse species to promote biodiversity.
Read more on the carbon conundrum here.
‘‘We Don’t See Those Benefits’: Verve Faces Employee Pushback Over 5% Health Benefits Fee’ – via Lookout Santa Cruz
To help fund health benefits for its full-time employees, Verve Coffee Roasters in Santa Cruz, California, added a health surcharge to all orders in August. However, some workers say they don’t see those benefits, and the surcharge is confusing customers and impacting tips.
As reported by Lily Belli for Lookout Santa Cruz, a 5% surcharge was added to all orders, and the company placed a sign by the registers informing customers that it would help “provide health benefits for our full-time team members.” Such fees are not uncommon in California, Belli reports, with other local businesses like Cat & Cloud Coffee and the restaurant Shadowbrook also adding surcharges.
Baristas told Belli that “the sign announcing the new fee is misleading guests by insinuating that the worker making their coffee receives health insurance when they don’t.” Verve provides health benefits to its full-time employees. However, not all its baristas are full-time. “I don’t receive health benefits, and there are no full-time workers at the cafe I work at,” one barista said.
Workers have dealt with negative reactions from customers and say their tips have been affected by the surcharge. “I don’t want to say correlation equals causation, but I would say there’s a pretty strong link when you’re charging people a fee that they think is going to the employees, they might feel less incentivized to tip,” another barista said.
In an emailed statement, Verve disputed the claims made in the article, stating that more than three-quarters of its retail workers qualify for health benefits. The company noted that the fee supports other benefits, such as paid time off, and is a more transparent way of increasing benefits than simply raising prices. “This service charge makes those benefits possible,” a Verve representative said.
Read more on the surcharge dispute here.
More News
‘Coca-Cola Explores Sale of Costa Coffee, Source Says’ – via Reuters
‘Starbucks Throttles Operations at US Coffee Plants to Curb Costs’ – via Bloomberg
‘Denmark to Scrap Coffee Tax’ – via Global Coffee Report
‘Dillanos Coffee Roasters Officially Revives Batdorf & Bronson Brand’ – via Daily Coffee News
‘Coffee Prices Rally Sharply as ICE Inventories Dwindle’ -via Nasdaq
Is Coffee Good For You?
According to a new study, coffee could impact the effectiveness of antibiotics.
Scientists in Germany explored how various chemical compounds impacted the bacteria E. coli, particularly how they altered the systems that control what gets in and out of the bacterial cells. This could influence how much antibiotic the bacteria absorb, and thus how effective the medicine is.
For the study, published in the journal PLOS Biology, the researchers examined 94 chemical substances, including caffeine. They found that a third of them interfered with gene regulators and transport proteins within E. coli.
The researchers zoomed in on caffeine as particularly noteworthy. They found that caffeine “triggers a cascade of events” that impacts what can enter the bacterial cell, “which in turn leads to a reduced uptake of antibiotics,” said study co-author Ana Rita Brochado from the University of Tübingen in a press release.
The authors caution that this was a lab-based study. They don’t yet know what impact caffeine would have on antibiotic resistance in humans or how much coffee one would need to consume while on antibiotics before it has an effect.
Nonetheless, “such fundamental research into the effect of substances consumed on a daily basis underscores the vital role of science in understanding and resolving real-world problems,” said Karla Pollmann, president of the University of Tübingen.
Beyond the Headlines
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