Shipment term

Keurig Dr Pepper executives explain drop in brewer shipments

BURLINGTON, MASS. – Coffee brewer shipments fell 15% in the third quarter ended Sept. 30 for Keurig Dr Pepper, but executives were quick to give reasons for the drop in an Oct. 27 earnings call.

According to Burlington-based Keurig Dr Pepper, the performance of brewer shipments in the quarter was in line with the company’s long-term goal of adding 2 million new households to the Keurig system each year. Three million were added in 2020 and again in 2021 during the COVID-19 pandemic.

Brewer shipments were up 16% from pre-COVID-19 levels, said acting chief financial officer George Lagoudakis.

Increased consumer mobility over the summer, higher retail prices for brewers and a decrease in advertising investment were headwinds in the quarter, said Ozan Dokmecioglu, chief executive.

“However, with the return of (advertising) investment and with life returning to normal such as the start of the school season and people starting to return to the office more, we have started to see an improvement in consumption” , did he declare. . “For example, when you look at market data in September compared to July and August, you will see an improvement.”

The company’s third-quarter net income of $180 million, or 13¢ per share on common stock, was down from $530 million, or 37¢ per share, in the third quarter of the year former. Net sales increased 11% to $3.62 billion from $3.25 billion.

Within Coffee Systems, net sales increased 4.7% to $1.21 billion from $1.16 billion, primarily due to price actions. Volume/mix fell 2.6% as lower brewer shipments more than offset pod shipment growth of 3.5%. Green coffee costs reached the highest level of the year due to corporate hedging. Operating profit fell 19% from $365 million to $295 million.

In packaged beverages, net sales rose 14% to $1.76 billion from $1.55 billion in the third quarter a year earlier. Soft drinks, Snapple, Mott’s, Core Hydration, Hawaiian Punch, Evian and Polar seltzers led the rise. The volume/mix was equal to the third quarter of the previous year.

In beverage concentrates, net sales increased 17% from $392 million to $459 million, driven by the realization of a strong net price of 17% and favorable volume/mix of 0, 7%. Volume increases at Dr Pepper and Crush were more than offset by declines at Schweppes and A&W.

In Latin America, net beverage sales increased 27% to $198 million from $156 million, behind net price realization of 17% and volume/mix growth of 12%.

In the first nine months of the fiscal year, company-wide net income was $983 million, or 69¢ per share on common stock, compared to $1.30 billion, or 92¢ per share, at the same period of the previous year. Nine-month net sales fell from $9.29 billion to $10.25 billion.