In an era where digital convenience is king, Keurig Dr Pepper is seizing the opportunity to foster a steady stream of revenue through coffee subscriptions.

The beverage titan spotlighted its robust digital channel performance in an analyst call on Thursday, Oct. 26, when discussing third-quarter financials.

Keurig Dr Pepper’s CEO, Robert Gamgort, shared insights on the company’s eCommerce trajectory. “eCommerce, which was growing prior to the pandemic, accelerated significantly during the pandemic, and it really has shown no signs of pulling back from that,” he said. He further highlighted the suitability of single-serve coffee for online sales, noting its high value, long shelf life, and easy shipping.

With a clear shift towards online purchasing of food and beverage items, research such as the “Consumer Interest in an Everyday App” report, developed with PayPal, underscores this trend. It revealed that out of over 2,200 U.S. consumers surveyed, 16% exclusively used online methods for grocery purchases in the past month, while 45% combined digital with traditional shopping.

Keurig Dr Pepper is aiming to capture customer fidelity through subscription models, enhancing its eCommerce presence.

Gamgort elaborated, “We’ve been increasing our own subscription business and services to the consumer. And as we put more SMART brewers out there, [that] allows for SMART consumption-based reordering, I think that eCommerce will continue to grow.”

The company’s subscription initiative features a subscribe-and-save format, offering customers 25% off regular purchases. Through its Auto-Delivery program, customers can select their preferred coffee pods to be delivered at intervals from two to 12 weeks.

The brand’s SMART brewers integrate with device apps, rewarding subscribers with points redeemable for products on each Auto-Delivery order.

Subscription models resonate with consumers, particularly for items like coffee that are purchased on a regular basis. According to the survey-based “The Impact of Subscription Models on Consumer Choice” report, in collaboration with sticky.io, 40% of subscribers have discount refill subscriptions, with higher popularity among older consumers.

For Keurig Dr Pepper, convenience is a significant drawcard, propelling the adoption of its digital platforms.

In Gamgort’s words, “The convenience of eCommerce and pickup and delivery services continues to resonate well after any pandemic-related uplift would have normalized.”

Sources: https://www.pymnts.com/earnings/2023/keurig-dr-pepper-ceo-says-coffee-subscription-will-drive-d2c-ecommerce-growth/

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