DE Peet’s (JDEP.AS), one of the world’s leading consumer coffee firms, posted a better-than-expected first-half operating profit on Wednesday and said it would exceed full-year plans despite a surge in green coffee prices following last month’s frost damage to Brazilian harvests.
Green coffee prices have already climbed by roughly 20% in 2020, according to CEO Fabien Simon, and the company is also experiencing hikes in transportation and other expenditures this year, which it expects to pass on to consumers.
“We are very optimistic we will meet our expectation despite these inflations, despite incremental inflation that has been flowing through the non-coffee side,” he added on the phone.
The scale of possible increases, he added, is competitive information, but the corporation is now consulting with merchants on how to implement them.
“Coffee is a relatively unique sector in the food and beverage space where green coffee headwinds and tailwinds pass through, and we expect that to happen again this time,” he said.
“We believe we have good pricing power throughout our business,” says the company.
JDE Peet’s, which owns a number of coffee and tea brands including Pickwick, Senseo, Tassimo, TiOra, and L’OR, reaffirmed its March prediction for organic sales growth of 3% to 5% for the full year and adjusted EBIT growth in the “single digits.”