Keurig Dr Pepper plans to acquire European coffee company JDE Peet’s for $18 billion, aiming to split into two focused beverage companies—one on coffee and the other on soft drinks—effectively undoing its 2018 merger with Dr Pepper. The deal reflects shifts in consumer demand and challenges in the coffee industry, with the new focus on coffee innovation and growth, pending regulatory approval expected in 2026.
Starbucks has introduced a new drink in China called the "Abundant Year Savory Latte," which combines Dongpo Braised Pork Flavor Sauce with espresso and steamed milk, priced at 68 yuan. The unusual drink has gained traction on Chinese social media, with some expressing curiosity and others skeptical due to the high price point. This move comes as China has become the biggest branded coffee shop market in the world, with Starbucks facing stiff competition from Luckin Coffee.
Despite a decline in U.S. instant coffee consumption, globally, soluble coffee is on the rise, with Nescafé, the largest coffee brand of Swiss-based Nestlé, dominating the market. Known for its affordability and convenience, Nescafé is consumed at a rate of 6,100 cups per second and is sold in 180 countries. With 25 factories worldwide, the brand's success is evident, and CNBC traveled to Vietnam, the world's second-largest coffee exporter, to explore Nescafé's operations and the future of soluble coffee.
Dutch Bros, a drive-through coffee chain, is aiming to become a major player in the coffee market despite competition from Starbucks and McDonald's. The company has seen significant growth, opening 159 new shops in 2023 and achieving a 4% increase in same-store sales. With a focus on exceptional margins and a unique customer service model, Dutch Bros is confident in its ability to expand to 4,000 stores. The company's emphasis on its employees, known as "broistas," and its fortressing strategy are key components of its growth plan. Despite concerns about its stock performance, Dutch Bros remains focused on enhancing its brand and customer experience.
Starbucks is expected to report its fiscal Q4 earnings with analysts predicting resilience in the US market but uncertainty in China. In the US, same-store sales are expected to be up 6.31%, driven by promotional activity and the launch of fall drink offerings. However, China's sales results are seen as a "wild card" due to delayed promotions around the Mid-Autumn Festival and stricter COVID lockdowns. The company's focus on expanding in China, where it plans to open 9,000 stores in the next two years, comes amid an economic slowdown and competition from local rivals. Starbucks will also provide an update on its Reinvention Plan, which includes initiatives aimed at driving growth by 2025.
