The American company Neat Dr. Pepper took over JDE Peet’s, the parent company of Douwe Egberts, on Monday. This can have consequences for the Senseo brand, which is also in the hands of JDE Peet’s.
The acquisition makes JDE Peet’s as a whole probably stronger, but can actually lead to risks for some Dutch brands. The purpose of such a takeover is to give the company a stronger position, says Retail expert Cor Molenaar of the Erasmus University to Nu.nl.
“I suspect that this is also the case here: the goal is to become more profitable,” he explains. “What people often do is look at strengths and weak brands and repel the weak brands.” A company can then continue with the strong brands and can make more profit.
‘Weak’ Senseo may be divested
An example of such a ‘weak’ brand is Senseo, says Molenaar. At the start in 2001 it was a great success. This was partly due to the way of coffee: with a Senseo device and the well-known pads you could create a ‘catering experience’ at home. The coffee flavor was known as less strong and the device as user -friendly, so that the brand precisely responds to the needs of the Dutchman.
25 years later, better coffee can be found in the hospitality industry and Senseo has lost a lot of popularity. The company has not developed sufficiently and takes off against fresh bean machines and brands with a stronger coffee flavor.
In 2020, Philips said goodbye to the devices. “Senseo is just not tasty,” says Molenaar. “Maybe under Dr. Pepper they will continue with a different form of coffee, such as cups or another grind.” But it is quite possible that we no longer see Senseo on the shelves, the retail expert expects.
Tea has little to fear
Pickwick, on the other hand, is “very strong”, says Molenaar. Certainly on the Dutch market it is a big player. If you come beyond the European tea market, then there is a lot of competition from English tea. But the English have a very different form of drinking tea: black, strong tea that is diluted with milk. “Pickwick is weak tea: there is a market in it,” says Molenaar.
So no alarm bell for Pickwick, but possibly for Senseo. What about Douwe Egberts himself? That is “very strong in the Netherlands”, Molenaar sees. For example, take a look at the shelves of Dutch supermarkets: Douwe Egberts dominates. Abroad you see many other brands mixed up.
With Neat Dr Pepper, the brands also get a strong American player behind him, says Dirk Mulder, retail expert at ING, to Nu.nl. With that they can better arm themselves at the price increases that the sector has been struggling for some time.
Where JDE Peet’s already has a strong position on the European market and neatly Dr. Pepper on the American market, the brands can join forces, Mulder explains. “They actually both appeal to a new market.”
No higher prices in supermarket
In any case, the merger will in any case have no influence on coffee prices, both experts expect. Coffee prices have been rising for years, which, among other things, causes troubles in the price negotiations with supermarkets. For example, earlier this year there were no products from Douwe Egbers on the shelves for weeks.
The culprit is the price of the Arabica-Boon, the most used coffee bean in the world. Mulder: “Due to climate change, the coffee harvests are more vulnerable.” In addition, the demand for coffee has increased in recent years, says the retail expert. That also drives up the coffee price. Molenaar: “The price is strongly determined by the coffee harvest and the offer. Not by such a takeover.”
According to Mulder, K Pepper can make cost savings neatly over the years, because the merger of the brands make the production chain more efficient. That can therefore ensure a lower price in the long term. “But not in the coming years,” says Mulder.
The American Company Neatly Dr. Pepper Acquired JDE Peet’s, The Parent Company of Douwe Egberts, On Monday. This could have consequences for the senseo brand, which is also owned by JDE Peet’s.
The acquisition Will Likely Make Jde Peet’s Stronger As A Whole, But It Could Pose Risks for Some Dutch Brands. The Purpose of Such An Acquisition is to give the Company a Stronger Position, Says Retail Expert Cor Molenaar or Erasmus University to NU.nl.
“I suspect that this is also the case here: the goal is to Become more profitable,” he explains. “What they ofe do is look at strong and weak brands and shed the weak brands.” A Company Can then Continue with the Strong Brands and Thus Make More Profit.
‘Weak’ Senseo May be discarded
An Example of Such A ‘Weak’ Brand is Senseo, Says Molenaar. When it started in 2001, it was a great success. This was partly due to the way of making coffee: with a senseo machine and the well-known pads, you could create a ‘hospitality experience’ at home. The Coffee Flavor was Known As Somewhat Less Strong and the Machine as User-Friendly, So the Brand Responded Precisely to the Needs of the Dutch.
25 Years later, Better Quality Coffee Can Be Found in The Catering Industry and Senseo Has Lost a Lot of Popularity. The Company Has Not Developed Sufficiently and is Losing Out To Fresh Bean Machines and Brands With A Stronger Coffee Flavor.
In 2020, Philips Said Goodbye to the Devices. “Senseo is Simply Not Tasty,” Molenaar Believes. “Maybe Under Dr Pepper They Will Continue with Another Form of Coffee, Such as Cups or Another Grind.” But It is QUITE POSSIBLE THAT WE WILL NO LONGER SENSEO ON THE SHELves, The Retail Expert Expects.
Tea Has Little to Fear
Pickwick, on the other hand, is “Very Strong,” Says Molenaar. Especialally on the Dutch Market It is a major player. If you go outside that to the European tea market, there is a lot of competition from English tea. But the English have a very different way of drinking tea: black, strong tea that is diluted with milk. “Pickwick is weak tea: there is a market for that,” Molenaar Sees.
So no alarm bells for pickwick, but possible for senseo. What about Douwe Egberts itself? That is “Very Strong in the Netherlands,” Molenaar Sees. For example, look at the shelves of dutch supermarkets: Douwe Egberts Dominates. Abroad you see many other brands mixed together.
With Neatly Dr Pepper, The Brands also Have a Strong American Player Behind Them, Says Dirk Mulder, Retail Expert at ING, to NU.nl. This allows them to Better Arm Themselves Against the Price Increases That The Sector Has Been Struggling with For Some Time.
Where Jde Peet’s Already Has a Strong position on the European Market and neatly Dr Pepper on the American Market, the Brands Can Join Forces, Mulder Explains. “They are actual addressing a new market.”
No Higher Prices in Supermarket
The Merger Will in Any Case Have No Influence on Coffee Prices in the Short Term, Both Experts Expect. Coffee prices have rising for years, which is causing struggles in price negotiations with supermarkets. For example, there were no douwe egberts products on the shelves for week earlier this year.
The Culprit is the price of the arabica bean, the most used coffee bean in the world. Mulder: “Due to Climate Change, Coffee Harvests Are More Vulnerable.” In Addition, Demand for Coffee Has Increased in Recent Years, Says The Retail Expert. That also drives up the coffee price. Molenaar: “The Price is Strongly Determined by the Coffee Harvest and Supply. Not by Such An Acquisition.”
Accordance to Mulder, neat Dr Pepper Can Make Cost Savings Over The Years, because the Mergers of the Brands Make The Production Chain More Efficient. That could lead to a lower price in the long term. “But not in the coming years,” Says Mulder.