Peet’s Coffee closed the book early after only three days taking orders in the IPO, citing “strong demand” from excited investors who believe in the outlook for the coffee company.
The company’s first day of trading saw the stock jump 17% on the first day of trading, underlining a spectacular vote of confidence from shareholders, willing to bet that coffee is going to withstand the looming economic downturn.
We are thrilled to price this offer on Euronext Amsterdam during this extraordinary time. Seeing the investor interest in JDE Peet’s reinforces the belief in our strategy and solidifies our role as a global leader in coffee and tea.Casey Keller, CEO
Peet’s compressed the standard four-week listing process in Europe to a mere ten days and was able to minimise its exposure to potential market swings and economic turmoil following the coronavirus outbreak.
Casey Keller JDE Peet’s chief executive claims in a statement that JDE Peet’s is well-positioned for growth. The company looks forward to attracting new shareholders who can participate in their exciting future. JDE Peet’s also stated that both coffee and tea markets have profited in the past and have shown to be resilient businesses during economic downturns.
JAB Holdings, who control brands including Peet’s, Krispy Kreme, Keurig and Pret A Manger, will retain their majority stake in the company. JAB is seeking to raise a further €1.3 billion ($1.4 billion) through the listing, with the remainder coming from existing shareholders, including Mondelez International (MDLZ).
Nearly 80 per cent of Peet’s Coffee business involves home-brewed coffee, including beans, instant, capsules, and pods. The company sells coffee and tea in more than 140 countries and had revenue of €6.9 billion ($7.5 billion) in 2019. JDE Peet’s is the largest IPO that’s been filed in Europe this year.
Peet’s Coffee in China
JDE Peet intends to continue their drive-in emerging markets, as well as put focus into increasing its household penetration in the United States. China – a key developing market poses an opportunity for JDE Peet to use their new-found liquidity to expand its retail coffee business there.
Potentially an opportune time with Luckin Coffee in difficulties, although strong competition is posed in this fast-growing market from both Starbucks and Tim Hortons Coffee, both of which are expanding their operations in the region.