Is Starbucks Nestle nervous about the world’s second-largest coffee group seeking to go public?

JAB Holdings, a German private consortium, is unfamiliar to many, but many of the companies it owns are industry giants such as Coty, the world’s largest perfume group, and Li Jie, the world’s largest home cleaning and disinfection group. In addition, JDE Peet’s, the world’s second-largest coffee group, is also owned by JAB Holdings, which includes the famous American coffee chain Peet’s, the boutique coffee brand Intelligentsia, the packaged coffee brand L’Or and Senseo, among others.

Original title: The world’s second-largest coffee group seeking to go public, Starbucks Nestle nervous?

Is Starbucks Nestle nervous about the world's second-largest coffee group seeking to go public?

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JDE Peet’s, which relies on the JAB consortium, has long been seen as a strong competitor to Nestle, and competition will intensify.

JDE Peet’s plans to formally submit an IPO on the Amsterdam Stock Exchange on May 19th, with a total of 2 billion euros ($2.2 billion) of capital raising, including about 700 million euros in new shares, mainly to pay off its previous debts, according to Reuters and the Financial Times.

If JDE Peet’s IPO is successful, it will be the biggest on a European exchange so far this year.

In fact, last year THE JAB Group began preparing for an IPO of its coffee business. JDE Peet’s is also a new company that merged last year: in December 2019, JAB merged with European packaging coffee giant Jacobs Douwe Egberts with coffee chain Peet’s, the CEO of The New Company. The combined JDE Peet’s business, which covers coffee catering and packaging products, has operations in 140 countries and generated revenues of 6.9 billion euros in 2019.

The merger at the end of last year and this year’s official IPO revealed two main signals: on the one hand, AS a maker of coffee beans and instant coffee that already has a large market in Europe, JAB is not satisfied with its achievements in packaging coffee, and the coffee restaurant chain will be an important starting point for their future.

JAB’s coffee-restaurant chain has been buying in recent years: Peet’s in 2012, Donut Coffee chain Krispy Kreme in 2016 and Britain’s Pret A Manger in 2018. In the future, with the launch of JDE Peet’s, Peet’s store expansion is bound to accelerate further, which will also put JDE Peet’s competition with Nestle and Starbucks on the table. Nestle bought Starbucks’ packaged coffee retail business last year for $7.15 billion, and the coffee market will be more competitive in the future.

Another sign is that the outbreak did not affect JAB’s judgment of the coffee market. Although many of Peet’s more than 250 coffee shops are still temporarily closed, and high-end boutique coffee shops such as JAB’s Intelligentsia have been hit by the outbreak, they have not delayed their IPO plans and are confident in the coffee market in the post-epidemic era, particularly in the packaged coffee sector.

Nestle’s packaging coffee business grew at a high unit in several markets in the first quarter of this year, boosting its overall first-quarter results.