Millions of people were left with no option but to work from home throughout 2020. This disrupted the coffee industry and benefited those with at-home exposure, especially Keurig Dr Pepper Inc (NASDAQ: KDP).
Keurig Momentum: One convenient way for consumers to get their caffeine fix is through a Keurig single-serve, at-home machine. While 2020 was a year of momentum for the Keurig brand, it also marked a continuation of multi-year momentum.
Keurig added 12 million households to the Keurig ecosystem over the past five years, Keurig Dr. Pepper CEO Bob Gambort said Wednesday on CNBC's "Closing Bell." This brings the total household penetration to 33 million households.
"The short-term impact was nice, but really the long-term impact has been consistent," the CEO said.
Despite nationwide shutdowns or restrictions at coffee shops, total coffee consumption has remained at about the same level as it was pre-pandemic. There was a "dramatic" shift as consumers were making and consuming coffee as 3 million new consumers bought a Keurig machine and other 8 million consumers upgraded existing ones.
Millions of new consumers have come to appreciate the convenience and value of making coffee at home, but also the quality improved "significantly" compared to prior years, the CEO said.
Carbonated Update: Among Keurig Dr. Pepper's total portfolio of hot and cold beverages, its on-premise business (restaurants, hospitality, convenience stores) was the most impacted by the COVID-19 pandemic, Gamgort said. On the other hand, the company did see a "nice pickup" in large outlet stores with take-home packs as well as e-commerce.
Despite facing challenges of offsetting weakness in one category with strength another, the company's performance was "spectacular."
"We gained share on 90% of our core-portfolio, so that also helped offset the challenges we faced," the CEO said.
(Photo: Marco Verch, Flickr)
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