KEURIG DR PEPPER AND LAVAZZA GROUP EXPAND PARTNERSHIP TO CREATE WIDER SALES AND DISTRIBUTION OPPORTUNITIES ACROSS NORTH AMERICA

Rhea-AI Summary

Keurig Dr Pepper (KDP) expands its partnership with Lavazza Group to include wider sales and distribution of Lavazza K-Cup® pods and the introduction of Kicking Horse® Coffee to the K-Cup® pod format. KDP will be the exclusive sourcing partner and manufacturer of premium Lavazza K-Cup® pods and will handle sales and distribution responsibilities in retail and e-commerce across the U.S. and Canada. The partnership marks a significant milestone for Lavazza and Kicking Horse, opening new avenues to reach a wider audience of coffee enthusiasts. Both companies are committed to responsibly sourcing their coffee and promoting the cultivation and trade of coffee in a manner that benefits coffee farmers, their communities, and the environment.

Insights

Market Research Analyst

The expansion of Keurig Dr Pepper's partnership with Lavazza Group signifies a strategic move to enhance product distribution and market penetration. By incorporating Kicking Horse® Coffee into the K-Cup® pod format, KDP is diversifying its product portfolio to cater to a broader consumer base. This is particularly relevant in the context of the growing single-serve coffee market, which is expected to continue expanding as consumers seek convenience and quality.

The emphasis on e-commerce and retail distribution channels reflects a trend in consumer goods where companies are aiming to improve direct-to-consumer reach. This is likely to improve product accessibility and could potentially lead to increased sales. However, it is also important to consider the competitive landscape of the coffee pod market. The entry of another premium brand could cannibalize sales of existing products within KDP's portfolio, though it could also capture a new segment of consumers who prefer organic and fair-trade options.

Financial Analyst

From a financial perspective, Keurig Dr Pepper's agreement with Lavazza Group could have a positive impact on the company's revenue streams, especially considering the added sales and distribution responsibilities. The expansion of the product line to include Kicking Horse® Coffee in K-Cup® pods could result in an uptick in sales volume, contributing to the company's top-line growth.

Investors should monitor the execution of this partnership, as effective integration and marketing strategies will be crucial for realizing potential financial benefits. It will be important to track subsequent earnings reports and any provided guidance on the impact of this partnership on KDP's financial performance. Additionally, operational efficiency in the manufacturing and distribution process will be key to maintaining profitability margins in the face of increased product offerings.

Sustainability Analyst

The joint commitment of Keurig Dr Pepper and Lavazza Group to sustainable coffee sourcing and their membership in World Coffee Research is a significant aspect of their partnership. This aligns with a growing consumer demand for ethically sourced and environmentally friendly products. The focus on fair trade and organic products by Kicking Horse® Coffee, in particular, may resonate with a segment of consumers that prioritize sustainability in their purchasing decisions.

While this ethical positioning could enhance brand reputation and loyalty, it is also essential to consider the cost implications of such practices. Sustainable sourcing can sometimes lead to higher product costs, which may be passed on to consumers. Companies must balance these costs with consumer willingness to pay a premium for sustainable products. The long-term impact on the brand's equity and consumer perception will be worth observing, as it may influence future purchasing trends and brand loyalty.

BURLINGTON, Mass. and FRISCO, Texas, Feb. 1, 2024 /PRNewswire/ -- Keurig Dr Pepper (NASDAQ: KDP) today announced the expansion of its current partnership with iconic Italian coffee company, Lavazza Group, to include wider sales and distribution of Lavazza K-Cup® pods and the introduction of the company's Canadian brand, Kicking Horse® Coffee, to the K-Cup® pod format.

Under the agreement, KDP will continue to be the exclusive sourcing partner and manufacturer of premium Lavazza K-Cup® pods and add sales and distribution responsibilities in retail and e-commerce across the U.S. and Canada. Future availability of premium coffee brand Kicking Horse® Coffee in a K-Cup® pod will provide a new experience for consumers to enjoy the brand through the Keurig brewing system.

"Lavazza has been a valued partner since 2014 and we are pleased to continue our collaboration as the brand becomes a member of our licensed brand family," said Patrick Minogue, President, U.S. Coffee.  "Having renowned, premium coffee brands Lavazza and now Kicking Horse® Coffee as part of the K-Cup® pod family underscores our ability to drive growth while providing consumers premium coffee brands available to enjoy at home."

"This partnership marks a significant milestone for Lavazza and Kicking Horse, as it opens new avenues to reach a wider audience of coffee enthusiasts. It represents an exceptional opportunity to fortify our collaboration with KDP," said Hossam Ashraf, Lavazza North America President. "At Lavazza Group, we take pride in our commitment to passion, integrity, and expertise, all of which contribute to delivering superior, high-quality coffee. We believe that KDP is the right partner to bring this exceptional coffee experience to more consumers across North America."

Cedric Malaga, CEO of Kicking Horse® Coffee shared, "At Kicking Horse Coffee, our mission is to bring better coffee to the world - we call it the best of coffee with the best of intentions.  Sharing our always fair trade and organic roasts with as many people as possible means we're delivering on this mission."

Keurig Dr Pepper and Lavazza Group promote the cultivation and trade of coffee in a manner that benefits coffee farmers, their communities and the environment. Both companies are committed to responsibly sourcing their coffee and are members of World Coffee Research — an international coalition of stakeholders working together to make a global impact and secure the quality of coffee for generations to come.

About Keurig Dr Pepper
Keurig Dr Pepper (KDP) is a leading beverage company in North America, with annual revenue of more than $14 billion and approximately 28,000 employees. KDP holds leadership positions in liquid refreshment beverages, including soft drinks, specialty coffee and tea, water, juice and juice drinks and mixers, and markets the #1 single serve coffee brewing system in the U.S. and Canada. The Company's portfolio of more than 125 owned, licensed and partner brands is designed to satisfy virtually any consumer need, any time, and includes Keurig®, Dr Pepper®, Canada Dry®, Clamato®, CORE®, Green Mountain Coffee Roasters®, Mott's®, Snapple®, and The Original Donut Shop®. Through its powerful sales and distribution network, KDP can deliver its portfolio of hot and cold beverages to nearly every point of purchase for consumers. The Company's Drink Well. Do Good. corporate responsibility platform is focused on the greatest opportunities for impact in the environment, its supply chain, the health and well-being of consumers and with its people and communities. For more information, visit www.keurigdrpepper.com.

About Lavazza Group
Lavazza, founded in Turin in 1895, has been owned by the Lavazza family for four generations. Today the Group is one of the leading players on the global coffee scene, with turnover of over €2.7 billion and a portfolio of top brands that lead their respective markets, such as Lavazza, Carte Noire, Merrild and Kicking Horse. It is active in all business sectors and has operations in 140 markets, with 8 manufacturing plants in 5 countries and about 5,500 collaborators all over the world. The Group's global presence is the result of over 125 years of growth and the more than 30 billion cups of Lavazza coffee produced every year are a testament to a remarkable success story, with the goal of continuing to offer the best coffee possible, in all forms, by focusing on every aspect of the supply chain, from the selection of the raw material to the product in the cup. Lavazza Group has revolutionized coffee culture by investing continuously in research and development: from the intuition that marked the company's earliest success - the coffee blend - to the development of innovative packaging solutions; from the first espresso sipped in Space to the dozens of industrial patents. The ability to be ahead of the times is also reflected in the focus on sustainability - economic, social and environmental - which has always been a benchmark for guiding corporate strategies. "Awakening a better world every morning" is the corporate purpose of Lavazza Group, with the aim of creating sustainable value for shareholders, collaborators, consumers and the communities in which it operates, combining competitiveness with social and environmental responsibility.

Media Contacts:
Keurig Dr Pepper         
Katie Gilroy     
T: 781-418-3345  
katie.gilroy@kdrp.com  

Lavazza Group
Sarah Agate
lavazza@autumncommunications.com

Investor Contacts:
Keurig Dr Pepper
Jane Gelfand
T: 888-340-5287
jane.gelfand@kdrp.com

Chethan Mallela
T: 888-340-5287
chethan.mallela@kdrp.com

 

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SOURCE Keurig Dr Pepper

FAQ

What is the expanded partnership between KDP and Lavazza Group about?

The expanded partnership involves wider sales and distribution of Lavazza K-Cup® pods and the introduction of Kicking Horse® Coffee to the K-Cup® pod format. KDP will be the exclusive sourcing partner and manufacturer of premium Lavazza K-Cup® pods and will handle sales and distribution responsibilities in retail and e-commerce across the U.S. and Canada.

What role will KDP play in the expanded partnership?

KDP will continue to be the exclusive sourcing partner and manufacturer of premium Lavazza K-Cup® pods and will add sales and distribution responsibilities in retail and e-commerce across the U.S. and Canada.

What is the significance of the expanded partnership for Lavazza and Kicking Horse?

The partnership marks a significant milestone for Lavazza and Kicking Horse, opening new avenues to reach a wider audience of coffee enthusiasts.

What are the companies' commitments to responsibly sourcing their coffee?

Both companies are committed to responsibly sourcing their coffee and promoting the cultivation and trade of coffee in a manner that benefits coffee farmers, their communities, and the environment.