Business: "Pool Water" in the Coffee? JAB's Big Bet on US Beverage Market

-WSJ

Peet’s, Panera Bread, Krispy Kreme, Dr Pepper, Stumptown—all well-known American brands. But what else do they have in common? They are owned by a secretive European holding company that 50 years ago was making industrial chemicals for swimming pools. Through multiple deals, JAB has stumped its publicly traded rivals with what seems like a mildly eccentric and expensive shopping spree. However, interviews with JAB executives, directors and portfolio companies offer an answer: The company is looking to mash together a fragmented industry to create a caffeine-fueled global powerhouse. JAB today sells coffee in nearly every form and venue. It distributes brands it doesn’t own such as Dunkin’ Donuts and Starbucks for its Keurig coffee maker in single-serve K-cups. The company sells its own brands of bottled cold coffee and bags of beans, such as Peet’s and Green Mountain. With its own bakeries and coffee shops, JAB competes directly with America’s biggest coffee chains. Its approach to the coffee business amounts to an expensive bet that the U.S. beverage industry is on the cusp of a reorganization that has been half a century in the making.