Coffee Service

Shelter-in-place mandates push Keurig Dr Pepper's business

May 19, 2020

Keurig Dr Pepper has seen a spike in demand, first due to pantry loading and now because of strong replenishment demand due to shelter-in-place mandates related to the COVID-19 pandemic, according a Ratings Direct analysis. The company's volume grew 5.6% for K-Cup pods, despite a big drop in away-from-home business late in the first quarter.

The company’s package segment posted a 9.1% increase, with volume mix up 8.7% in the quarter.

Ratings Direct expects at-home consumption to exceed lost sales in the away-from-home channel in calendar year 2020, however, sales will be flat in the second quarter due to the large number of closures of office buildlings, restaurants, bars and entertainment venues.

Ratings Direct believes KDP will benefit from increased at-home coffee consumption over the next few years on account of consumers' recently reduced on-premise consumption is accelerating household penetration of KDP's coffee products.

KDP 82% market share in single-serve coffee pods.

For an update on how the coronavirus is affecting the convenience services industry, click here.