JAB Holding has acquired a number of coffee chains, including Keurig Green Mountain in a $13.9B cash acquisition — its largest deal to date.
Since 2012, Luxembourg-based holding group JAB Holding has been quietly consolidating US coffee businesses under its umbrella.
JAB, which does not disclose its financial information and tends not to speak to the press, began its coffee shopping spree by acquiring Peet’s Coffee and Tea in 2012. Since then, JAB has acquired a number of other chains, including Keurig Green Mountain in a $13.9B cash acquisition — its largest deal to date. After falling under the JAB empire, some of these companies have turned into acquisitive powerhouses themselves.
Using CB Insights data, we analyzed JAB’s growing family tree to see where the company and its subsidiaries are placing their bets across the US coffee and bakery space.
JAB serves as the investment vehicle for the Reimann family, the descendants of businessman Johan A. Benckiser who founded industrial chemicals company Benckiser in the 1820s.
JAB continues to hold a stake in Benckiser, which merged with Reckitt & Colman in 1999, and then rebranded to RB in 2014. RB’s early successes included bringing Lysol to market in the 1890s, and today the company owns brands from Mucinex to Woolite to Durex condoms. With its shift to coffee, JAB reduced its RB ownership to 7.9% in September 2017.
Besides its home goods holdings, JAB Holding initially focused on luxury. It acquired luxury goods company Bally International, and became the majority shareholder for leading beauty company Coty, which owns the beauty businesses of Calvin Klein, Marc Jacobs, and 75 other brands.
Starting in 2012, JAB began to focus on the US coffee and bakery space. To strengthen its shifting focus, JAB sold over $30M worth of its Coty stock in 2015. It also sold luxury shoemaker Jimmy Choo to Michael Kors for $1.2B in July 2017.
Below, we look at JAB’s acquisitions (as well as those of its subsidiaries) to highlight the company’s shifting focus.
A CAFFEINATED SHIFT
The US coffee industry has transformed over the past few decades, driven early on by Starbucks and Peet’s, and more recently by startup players like Stumptown and Blue Bottle. With Americans spending roughly $23.4B in coffeehouses in 2017, it’s no surprise that the industry continues to gain attention.
In November 2017, JAB spurred a rash of articles speculating that the financial behemoth was considering acquiring Dunkin Donuts. With a $5.3B+ market cap, Dunkin Donuts would be pricey, though not out of line of JAB’s prior deals.
Peet’s Coffee and Tea: JAB acquired Peet’s Coffee and Tea for $973.9M in July 2012, marking its entry into the coffee space. Founded in 1966, CA-based Peet’s operated 196 coffee shops when it was acquired, a number that has grown to over 240 today. The deal represented somewhat of a pivot for JAB, which two months prior had attempted, then withdrawn, a $10.7B takeover bid of Avon Products from its portfolio company Coty.
The company went on to acquire Mighty Leaf Tea in 2014, its first of 3 acquisitions in the space.
Peet’s then dove into premium third-wave coffee, a movement marked by the desire to produce high-quality coffee, and acquired both Stumptown and Intelligentsia in 2015. Both brands emphasize artisinal coffee and transparent sourcing.
More recently, in August 2017, Peet’s made its first equity investment — into Revive Kombucha, a bottled kombucha startup which signifies a departure from Peet’s core business. Kombucha has grown as a trend over the past several years, often catering to similar demographics as artisinal coffee does, and Revive had even launched a coffee-kombucha crossover product prior to the Peet’s deal.
Caribou Coffee: Six months after its Peet’s acquisition, JAB acquired Caribou Coffee. The Minnesota-based chain operates over 400 coffee shops and franchises in the US, concentrated in the Midwest, as well as international franchises in 10 countries.
Keurig Green Mountain: In 2016, JAB announced its largest deal to date: a $13.9B cash acquisition of Keurig Green Mountain. Coffee and coffee machine maker Keurig Green Mountain had seen its stock plunge over 70% throughout 2015, which perhaps made it an attractive target.
biting into bagels and baked goods
Einstein Noah Restaurant Group (Einstein Brothers Bagels): In September 2014, JAB spent $374M to take Einstein Noah private. At the time of the deal, Einstein Noah operated 857 stores (including franchises) selling coffee and bagels, signifying a new focus area for JAB.
Krispy Kreme: In May of 2016, JAB acquired Krispy Kreme Doughnuts for $1.35B, which had previously gone public in 2000. A few months later, Krispy Kreme re-acquired its UK business, which had been sold to PE firm Alcuin in 2011.
Panera Bread: Continuing its push from coffee into baked goods, JAB acquired cafe and bakery chain Panera Bread in July 2017 for $7.5B. Prior its acquisition, Panera acquired a majority stake in Tatte Bakery. Post-acquisition, Panera bought smaller rival bakery chain Au Bon Pain in November 2017.
Bruegger’s Bagels: Caribou Coffee acquired coffee and bagel chain Bruegger’s Bagels in August 2017. The chain has roughly 270 locations.