JDE Peet’s plans €500 million cost cuts amid rising coffee prices

JDE Peet’s, the company behind Douwe Egberts and Pickwick, announced plans to cut 500 million euros in costs over the next several years as it seeks to drive profit growth despite rising coffee bean prices.

The measures were presented by Rafael Oliveira, who was appointed CEO in November following multiple leadership changes. Oliveira said the savings will come from streamlining the company’s product portfolio, simplifying the organizational model, improving efficiency and raising productivity. According to JDE Peet’s, more than half of the planned cuts must be realized by the end of 2027.

Half of the cost reductions will be reinvested to fund growth initiatives, while the remaining savings will be used to accelerate profit increases. Under its new strategy, the company plans significant investments in three areas: Peet’s coffee shops in the United States, the L’OR coffee brand and ten local brands led by Jacobs.

JDE Peet’s recently decided to raise prices again in the Netherlands. As a result, coffee sold in stores could become up to 25 percent more expensive. Earlier this year, the company also held negotiations with supermarkets including Jumbo, Albert Heijn and Picnic about purchasing prices. Those talks led to several weeks in which fewer or no JDE Peet’s products were available on store shelves.

The company stated that a further price increase is unavoidable due to rising costs. “There we see that private label coffee is increasing in price just as much, sometimes even more,” JDE Peet’s noted last week. “This shows that all coffee producers are affected by broader market trends.”

Last year, JDE Peet’s reported net profit of 543 million euros, an increase of more than 49 percent compared to the previous year. Revenue rose about 8 percent to 8.8 billion euros, partly driven by earlier price hikes.