Key Points:
- Strategy is focussed on simplifying and reinvesting in highest-potential growth opportunities
- Savings to be equally split between reinvestments for growth and profit expansion
- Sets new, accelerating medium-term financial targets
JDE Peet’s has announced a sweeping new strategy to sharpen its brand focus, boost productivity and deliver sustainable value. The ‘Reignite the Amazing’ plan, revealed at the company’s Capital Markets Day in Amsterdam today, outlines a multi-phase roadmap designed to accelerate growth while delivering €500 million (£428m) in net savings by 2027.
The strategy centres around three “Big Bets”: premium US brand Peet’s, global player L’OR and a portfolio of ten local market icons led by Jacobs. These brands have been identified as key drivers of future growth, capable of capturing both established and emerging consumer demand.
“As the world’s largest pure-play coffee company, we are uniquely positioned to capture the long-term opportunities this resilient and vibrant coffee category offers,” said CEO Rafa Oliveira.
“Our new strategy provides a clear framework consisting of an ambitious and focused plan to unlock sustainable, profitable growth and drive strong cash generation by combining the scale and expertise of an industry leader with agility, creativity and the innovative mindset of a startup.”
Streamlined Structure and Reinvestment in Growth
A major element of the new strategy involves simplifying JDE Peet’s organisational model and streamlining its product portfolio. The company aims to deliver €500 million in net savings, with more than half expected to be realised by the end of 2027. Half of these savings will be reinvested in high-potential initiatives and capabilities, while the remainder will go toward strengthening profitability.
The company also signalled a more disciplined capital allocation approach, including:
- Organic investment in its three “Big Bets”
- A target net leverage ratio of 2x to strengthen the balance sheet
- Steady dividend growth and share buybacks
- A shift away from leveraged acquisitions, favouring asset-light M&A opportunities
The new strategy is expected to have implications for the UK retail market, where brands like L’OR and Kenco, part of JDE Peet’s portfolio, are well-established in supermarkets and convenience channels. The renewed focus on brand-led innovation and operational efficiency could lead to enhanced marketing support, product development and promotional activity in UK stores.
Financial Targets and Long-Term Vision
JDE Peet’s has also outlined medium- to long-term financial targets, with projected growth in gross profit, adjusted EBIT and free cash flow through 2032. Targets include:
- €2 billion cumulative free cash flow by 2026–27
- At least €2 billion from 2028–29
- €3.5 billion or more from 2030 onwards
In 2024, JDE Peet’s posted €8.8 billion in sales across more than 100 markets. The company serves 4,400 cups of coffee every second and employs over 21,000 people globally.
“Led by our strong, iconic brands and backed by our challenger mindset, and enhanced capabilities, we will be laser-focused on executing with excellence, delivering sustained, long-term value for our stakeholders and generating shareholder returns that are top-tier among CPG companies,” Oliveira concluded.