The German conglomerate, privately owned by the Reimann family, continues a streak of high-profile acquisitions in the U.S. consumer goods sector.
Last month the group said it will buy Texas-based Dr Pepper Snapple, the world’s fifth-biggest soft drink maker, in a deal worth over $21 billion. JAB Holding has steadily grown its portfolio of American food and beverage companies over the past few years, with a particular focus on coffee. In 2016 JAB acquired both Keurig Green Mountain and Krispy Kreme Doughnuts. In 2017 it expanded its restaurant holdings by acquiring fast casual bakery chain Panera Bread, which has about 2,000 locations and owns another bakery and café chain, Au Bon Pain.
JAB plans to merge Dr Pepper Snapple with Keurig Green Mountain to create a beverage giant called Keurig Dr Pepper. Seasoned food industry executive and Keurig CEO Bob Gamgort has been appointed CEO of the combined company. Bart Becht, former Chief Executive of British consumer goods firm Reckitt Benckiser, and one of the industry veterans who manages JAB, will serve as Chairman.
In building what many are referring to as a “coffee empire”, JAB seems to be signalling its intention to compete with giants such as Nestlé and Starbucks in America’s coffee industry. "This is part of a much bigger story”, Starbucks Executive Chairman and former CEO Howard Schultz remarked at the time of the Panera deal. “JAB wants to become the largest coffee company in the world.”
JAB Holding had previously set out to develop into a luxury group, but as The Economist opines, “The change of focus looks astute. Consumers, readier to pay more for experiences rather than just products, show an ever-growing fondness for pricey shots of strong coffee”. A 2017 survey found that over 40% of American adults drink pricey “speciality” coffee daily.
Exactly where JAB is going within the global food industry is a matter of speculation, as the family taking the buying decisions is famously secretive. Some analysts liken the group to Brazilian investment group 3G Capital, which has gobbled up consumer goods firms such as Kraft Heinz and AB InBev, as well as restaurant chains, and drastically slashed costs. JAB bristles at the comparison, however, claiming to take a more long-term view.