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Jacobs Douwe Egberts is the world's second biggest coffee company, created in July 2015 from the merger of what was previously DE Master Blenders 1753 with the corresponding division of food giant Mondelez. Master Blenders was already one of the leaders in the global sector, and the #1 in several European markets including the Netherlands, Belgium, Denmark and Hungary. Brands include Douwe Egberts and Pilao coffee, Pickwick teas and the Senseo home coffee system. The Mondelez deal added Jacobs, Kenco and the Tassimo system, among others. Although the core of its business is in Europe, JDE also has a strong presence in selected other markets including Brazil (where it is the local #1) and Australia, and is gradually expanding that footprint through acquisition. Via their investment company JAB Holdings, the Reimann family also own a wide variety of other businesses, including, from 2016 Keurig Green Mountain and Krispy Kreme doughnuts.
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Formerly a division of diversified conglomerate Sara Lee Corp, DE Master Blenders was spun out as an independent company in 2012. The following year, it was acquired outright for €7.5bn by JAB Investments, the private investment group of the German-Austrian Reimann family, also at that time the owners of Coty and a small collection of luxury fashion brands. In May 2014, Master Blenders agreed to merge with the corresponding division of Mondelez. The latter injected its global portfolio into DE Master Blenders in return for $5bn in cash and what became a 43.5% equity stake in the combined business, which adopted the new name of Jacobs Douwe Egberts. The Reimann family's investment company JAB Holdings controls the majority stake. In 2015, Euromonitor estimated around 12% share of the global coffee market for JDE. Keurig Green Mountain, acquired separately by JAB in 2016, had around 3%.
Jacobs Douwe Egberts claims to hold the #1 or #2 position in 27 countries globally. Its lead brand is Douwe Egberts, sold in both traditional roast and instant forms. This is supported by a large collection of local brands. From the old Master Blenders portfolio, these include Maison du Cafe in France, Marcilla in Spain, Jacqmotte in Belgium, Prima in Poland, as well as Cafe Pilao, Cafe do Ponto, Caboclo, Moka and Damasco in Brazil, and Harris and Moccona in Australia. The former Mondelez coffee portfolio is equally diverse. The biggest brand by retail value in that portfolio is Jacobs, the leading premium brand in Germany and throughout most of Central & Eastern Europe. Euromonitor ranked it as the world's 4th biggest coffee brand by retail sales in 2013, with 2.8% global share and 4.1% share in Europe. The best seller in Scandinavia is Gevalia, while in the UK, its lead brand is Kenco, also the country's #2 instant coffee behind Nescafe. IRI estimated local supermarket sales of £117m for ye Jun 2016 (to Nescafe's £444m). Other supporting brands include Cafe Hag and Onko, Jacques Vabre, Spain's Saimaza and Canada's Nabob. The group has international rights to Kraft's Maxwell House, which is a leading brand in China and other Asian markets. Towards the end of 2016, JDE took steps to expand its portfolio still further with a deal to acquire Singaporean coffee and tea producer Super Group, makers of the second largest instant coffee brand in Southeast Asia after Nestle's Nescafe.
The group also has a sizeable presence in the tea market with the Pickwick brand. This holds leading positions in several European markets (including the Netherlands), supported by Hornimans, the #1 in Spain. The group acquired North American premium brand Tea Forte in 2012.
Several other brands were sold to win regulatory approval for the creation of JDE. Carte Noire, the old group's lead brand in France and Benelux territories with 1.5% global share and 3.1% in Europe, was sold in 2016 to Lavazza, along with Danish brand Merrild. A joint venture in Japan between Mondelez and Ajinomoto to market local coffee brands including Blendy and Maxim was dissolved in 2015. Ajinomoto bought out Mondelez for around $270m.
The US coffee businesses previously owned by Sara Lee had all been sold prior to Master Blenders' demerger. Sara Lee's standalone US roast coffee brands Chock Full o'Nuts, Hills Bros, MJB and Chase & Sanborn were sold in 2005 to Italian marketer Segafredo Zanetti in 2005 for $82.5m. The remaining coffee operations in North America, almost all in foodservice, were sold to JM Smucker in 2011 for $350m.
The group also markets several home and office coffee-making and vending systems, including twin brands Senseo and Tassimo. Senseo was originally launched by Sara Lee as a joint venture with Philips. Introduced in Europe in 2001 in the wake of Nestle's Nespresso, it arrived in the US for the first time in 2004, generating a storm of activity among other leading coffee marketers. One such rival was Kraft's Tassimo. This was initially introduced in France, and began rolling out into other markets during 2005, starting with the US. Following the split of Kraft and Mondelez, the latter took charge of the Tassimo system. The group also produces out-of-home coffee systems under the Cafitesse brand.
At the beginning of 2016, JAB also acquired Keurig Green Mountain, makers of the leading US single-serve coffee system. JDE and Keurig are both controlled via umbrella entity Acorn Holdings, itself a division of JAB Holdings. Following that deal, Mondelez agreed to reduce its holding in JDE to 26.5% in exchange for a holding of just over 24% of Keurig Green Mountain.
In 2013, according to Euromonitor, Tassimo was the #3 coffee system globally behind Nespresso/Dolce Gusto and Keurig with 1.1% share of retail coffee sales. It was the #2 system in North America with 2.6% to Keurig's 18.4%. Senseo was the #4 coffee system globally with 0.9% share of retail coffee.
Sara Lee/Master Blenders and Mondelez also both launched direct attacks on rival Nespresso's capsule format. In 2010, France was the test market for the launch of Sara Lee's L'Or EspressO, a range of generic coffee pods to fit the Nestle-owned system. The Swiss company retaliated with a lawsuit, arguing that Sara Lee's version of the Nespresso capsule infringed copyright. However, so far it has had no success enforcing that claim, and the L'Or brand has been steadily rolled out in several other European markets. Similarly, Mondelez introduced its own line of Nespresso-compatible capsules under the Jacobs and Carte Noire brands.
The Reimann family also control a variety of other interests in the coffee market, as well as being the biggest shareholders in beauty giant Coty and packaged goods business Reckitt Benckiser. Coffee was a new venture for them in 2012. That year, their JAB Holdings company acquired upscale US coffee roaster and retail chain Peet's for around $974m, roughly three times annual revenues. The company has around 200 stores, mainly in California, and also sells packaged coffee through selected supermarkets. Later the same year, JAB acquired another US coffee shop chain, Caribou Coffee, for $336m. Caribou has more than 600 stores in the Midwest and southeast. This was followed in 2014 by bagel shop chain Einstein Bros, for $374m, and in Oct 2015 premium US roaster and retailer Stumptown Coffee joined the portfolio. The following May, JAB agreed to acquire the global Krispy Kreme business for $1.35bn. All five US businesses are held within a separate unit of the parent investment group, JAB Beech. Yet another unit, controls the two leading coffee retailers and roasters in Nordic markets, Espresso House and Baresso.
In Spring 2017, JAB acquired US bakery and sandwich chain Panera Bread Company for $7.5bn. A key attraction is Panera's digital technology, which could be rolled out to JAB's other businesses. The chain offers an app which allows customers to order and pay for food in advance on their smartphones to speed up collection times. That system now contributes almost a quarter of instore sales, and has given Panera a database of 25m customers. Panera founder & CEO Ron Shaich built the business from a single outlet in Boston to a system comprising 2,000 outlets and combined sales of around $5bn. Later the same year, JAB acquired Au Bon Coin, at one time a sister chain to Panera, for an undisclosed sum.
Until recently, JAB also controlled a small collection of luxury brands. These were originally held in umbrella unit Labelux, but that entity was subsequently dissolved, and the three main businesses now operate separately. They were celebrated shoemaker Jimmy Choo, also part-public; as well as another footwear manufacturer and retailer Bally and British fashion brand Belstaff. In Spring 2017, JAB put its remaining shares in Jimmy Choo up for sale and also announced plans to seek a buyer for its other luxury investments. Jimmy Choo was acquired in 2017 by Michael Kors; Belstaff by chemicals group Ineos. Bally was sold in 2018 to Chinese textile manufacturer Shandong Ruyi.
JAB also has a 11% equity stake in You&MrJones, the brandtech business launched by former Havas CEO David Jones.
DE Master Blenders reported revenues for the year to June 2012 of €2.80bn, up 8%; but profit halved to €132m. The Netherlands alone accounted for 29% of sales in 2012, and Brazil for 17%, followed by France, Belgium and Germany, Australia and Spain. However, performance was troubled after the business was demerged from Sara Lee. Its first set of quarterly results as a standalone company were badly affected by newly discovered accounting irregularities in its Brazilian subsidiary, causing its share price to plunge. At around the same time, the Reimann family behind Coty seized the opportunity to acquire a 15% stake in the business. In March 2013 they launched a full bid for the business.
More detailed recent figures are not available. In 2013, DE Master Blenders claimed revenues of €2.5bn. Its biggest market is Netherlands, accounting for 27% of sales, followed by Brazil (18%) and France (13%). All other countries accounted for 7% of sales or less. Following the merger with Mondelez' coffee division, the group claimed combined revenues of over €5bn for 2016.
JAB Holding Company is based in Luxemburg. It reported consolidated income of €3.54bn in 2015.
Bart Becht is chairman of JAB Holding Company, and joint partner alongside Peter Harf and Olivier Goudet. Harf and Goudet also have close ties with the Brazilian investors behind 3G Venture Capital, which controls Anheuser-Busch InBev, Restaurant Brands International and Kraft Heinz Company. Goudet is also chairman of AB InBev.
JAB Holding Company is in turn controlled by Austrian investment company Agnaten SE, the vehicle for the now substantial fortunes of Wolfgang, Stefan, Renate and Matthias Reimann, heirs to the wealth of Ludwig Reimann, the former manager of what was originally a chemicals company owned by Johann Adam Benckiser. Reimann married Benckiser's daughter and took control of the business after his death. The business passed down through the family to Albert Reimann Jr, who died in 1984, leaving equal shares to each of his nine adopted children. The Benckiser chemicals business merged with British consumer goods group Reckitt & Colman in 1997, a move which made the Reimann family very wealthy indeed. Five of the nine heirs sold their shares, leaving the four remaining principals with control of JAB.
The group traces its heritage back to Egbert Douwes, a Dutchman who opened a general grocery in the village of Joure in the Netherlands in 1753. The business gradually began to specialise in coffee and tea. The company name of Douwe Egberts was adopted in 1920, and the business, then still family owned, expanded into other European markets after the Second World War. It was acquired by Sara Lee Corp in 1978. See Sara Lee Corp for Sara Lee history.
Last full revision 6th January 2017
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