Keurig Dr Pepper raises guidance after “exceptional first quarter”

Keurig Dr Pepper (KDP) has reported 11.1% growth in net sales to $2.9 billion for Q1, after the company saw ‘strong growth’ across all of its business segments.

Both of the beverage giant’s largest units saw overall net sales growth in 2020 – with packaged beverages growing its net sales by 8.5%, while coffee systems recorded a 4.7% increase.

This trend continued in the first quarter of 2021, with net sales for the packaged beverages and coffee systems units growing by 7.4% and 17.4% respectively.

The coffee systems segment saw pod volume growth of 13.7% driven by strong at-home consumption, which was partially offset by weakness in the company’s away-from-home business. Meanwhile, brewer volume recorded growth of 61% in the quarter, reflecting strong retail consumption.

In packaged beverages, net sales growth was driven by Dr Pepper, A&W, Canada Dry, Sunkist, 7UP and Squirt carbonated soft drinks, as well as growth of Snapple and Clamato, partially offset by a decline in Bai.

For the quarter ending 31 March, both the company’s Latin America beverages and beverages concentrates divisions grew their net sales (by 6.8% and 7.2% respectively), after recording declines in 2020.

KDP saw its GAAP operating income increase 37% to $640 million for the quarter, reflecting factors including the growth in net sales and lower marketing spending compared to pre-pandemic investment levels in Q1 2020.

The company has raised its guidance for 2021 net sales growth to 4-6% – on a constant currency basis – up from its prior projection of 3-4% growth.

“We delivered an exceptional first quarter, driving double-digit net sales and earnings growth, behind outstanding in-market execution,” said Keurig Dr Pepper chairman and CEO, Bob Gamgort.

“Looking forward, we see an improving, but volatile, macro environment marked by increasing consumer mobility and rising inflationary headwinds.”