Like Jacobs Kaffee, the coffee brand Senseo belongs to the manufacturer JDE Peet’s. JAB Holding and its co-investors own the majority of the listed group.
(Photo: dpa)
Dusseldorf Coffee, soft drinks, perfume, donuts and veterinary clinics – the Reimann family, which is one of the richest industrial heirs in Germany, has spread its fortune widely in companies. The heirs of the Ludwigshafen chemical dynasty JA Benckiser have invested many billions with their JAB Holding and other major investors. But the energy price shock, inflation and stock market slump have also hit these holdings. The value of the JAB portfolio fell from $51.7 billion to $47.4 billion in the first half of 2022.
With a minus of 11.4 percent, JAB loses less than the global stock index MSCI World in a year-on-year comparison. It collapsed by 20.2 percent in the first half of the year. “This gives us confidence that our investment style is well prepared for today’s volatile markets and economic crises,” says the half-year report. JAB sees itself as a long-term investor. The ratings fluctuate wildly. As of the end of August, the losses were only half as large as at the end of June.
Since 2012, the Reimann family has bundled their assets in the JAB holding company. Chief strategist Peter Harf, today chairman of JAB, has built up a network of company holdings since the 1980s. At the start of JAB Holding in 2012, their value was around nine billion dollars. At the end of June 2022, the holding company’s assets were valued at $31 billion – $3 billion less than half a year earlier.
The Reimann family own around 90 percent of JAB Holding. Twelve partners, including CEO Olivier Goudet, Chairman Peter Harf and Vice-CEO Joachim Creus, hold additional shares. The JAB partners not only actively manage the family’s assets. The JAB Consumer Partners fund has been collecting capital from family offices and institutional investors since 2014. This is being invested in parallel in JAB holdings – currently there are almost 16 billion dollars.
Top jobs of the day
Find the best jobs now and
be notified by email.
Thanks to this concentrated financial power, JAB was able to buy heavily. Today, about a third of US beverage and coffee company Keurig is owned by Dr. Pepper to the JAB kingdom. In addition, JAB and its co-investors own 57 percent of the coffee group JDE Peet’s (Jacobs, Senseo, Tassimo) and 54 percent of the cosmetics specialist Coty. JAB’s strategy is: buy companies in a branch, build them up, merge them and list them on the stock exchange.
In just eight years, JAB had bought various coffee brands together and successfully floated them on the Amsterdam Stock Exchange as JDE Peet’s in May 2020. In the summer of 2021, the US donut chain Krispy Kreme started trading on the Nasdaq, but raised less money than hoped. Recently there has been speculation in the industry that JAB is again showing interest in its competitor Dunkin’ Donuts.
>> Read here: Like the Reimann family with Espresso House wants to attack Starbucks
In times of economic crisis and inflation, JAB has become a little more cautious – at least when it comes to going public. The planned IPO of the Panera Brands café chains was put on hold in the summer. Large restaurateur Danny Meyer had left as a co-investor. Panera Brands includes coffee chains such as Panera Bread, Caribou Coffee and Einstein Bros. Bagel with 4,000 stores in ten countries. CEO Niren Chaudhary emphasized: “We will continue to monitor the IPO as soon as market conditions improve.”
Animal health as a future market
In the first half of the year, JAB made significant purchases in the new animal health business, investing 850 million dollars, for example by entering the Sage emergency veterinary clinics. Provider Ethos was added in July. JAB also sees a future market in pet insurance. In the first half of the year, acquisitions were made for 495 million dollars. The Pinnacle Pet Group, a joint venture with BNP Paribas Cardif, acquired JAB, the German market leader for pet insurance Agila, in July.
JAB plans to list Panera Bread and other bakery and cafe chains. The plan has been put on hold for the time being.
(Photo: imago/Levine-Roberts)
In order to be able to make acquisitions like this at any time, JAB kept its liquidity at a record level of $7.2 billion at the end of June. At the same time, two bonds worth 500 million dollars each were issued in the first half of the year.
The rating agency S&P keeps the rating at BBB+ with a stable outlook. “Participations proved to be relatively robust in the face of the declining economic development and fluctuations on the stock exchanges,” writes analyst Marta Bevilacqua. S&P makes a better rating primarily dependent on a more cautious financial policy over a longer period of time, combined with more prudent risk management. JAB should further diversify its portfolio and reduce debt.
More: JAB Vice Joachim Creus: “The Reimanns’ secret of success is unity.”