Keurig CEO, Dr. Pepper, Tim Cofer, said the prices exercised additional pressure on the company during a call for results on Thursday, especially with regard to his coffee business, which KDP expects to be “moderate” for the rest of the year.
“The inflation of raw materials will be based as we drive in the back half and we drive in our highest cost hedges on green coffee,” said Coffe. “The pricing impacts will become prominent. And we all know that the tariff situation is a bit fluid.”
Keurig is one of the largest coffee importers in the United States, with Starbucks (SBUX) and Nestlé (NSRGY). The United States is obtaining supplies on most of its Brazil coffee, which is expected to face 50% of its products on August 1, and Colombia, which faces a price rate of 10%.
In the Keurig coffee sector, the volume of devices decreased by 22.6% during the quarter, reflecting the impacts of the management of retailers and the volume of K-CUP pods decreased by 3.7%, reflecting the elasticity of the categories in response to price increases, the company reported.
“Our retail partners will probably continue to manage their inventory levels closely, in particular on brewers,” commented COFER. “And then finally, you know that we have made a series of prices at the start of the year. We have announced another price series that will take effect next month, and we will have to watch closely how this elasticity is evolving.”
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