Privately owned investment firm JAB Holding Co, best known for stirring up the coffee industry with a string of deals, sees huge opportunities for acquisitions in the market for non-alcoholic beverages, one of its senior partners said in an interview with Germany’s Manager Magazin published on Thursday.
Asked about JAB’s move this year to merge its Keurig Green Mountain coffee business with soda maker Dr Pepper Snapple Group, Peter Harf said: “If we stuck to traditional coffee products, we’d have a growth problem at some point.”
He said further acquisitions would be the logical next step. “The global market for non-alcoholic beverages has a volume of $1.3 trillion. There are huge opportunities there.”
Harf said the German billionaire Reimann family that invests its fortune via JAB had set clear rules to limit investments to fast-moving consumer goods and exclude banks, insurance companies, alcohol, tobacco and also luxury goods, an area the holding recently exited with the sale of Bally.
It was also essential for the Reimann family that JAB keep an investment grade credit rating, Harf said.
JAB has built a coffee empire over the past five years, trailing market leader Nestle (NESN.S), with packaged brands like Douwe Egberts, coffee house chains like Balzac Coffee, and Keurig, the leading single-serve brewer system in the United States. It also has stakes in cosmetics firm Coty Inc (COTY.N) and household and healthcare group Reckitt Benckiser (RB.L).
Asked whether JAB would also have been interested in taking over Starbucks’ (SBUX.O) retail and food service business Nestle acquired earlier this year, Harf said: “Not really. If anything, we would have tried to buy the whole company, including the store network. But Starbucks is worth up to $80 billion. That is still a bit too big for us.”