Java Republic may brew mergers and acquisitions plan as coffee bean prices continue to rise

Irish roaster and supplier on the lookout for ‘opportunities’ as sector continues to face cost challenges

The coffee firm recorded sales of €14.7m last year, with an operating profit of €707,103. In 2019, Spanish coffee group Cafento snapped up Java Republic in a deal reportedly worth around €30m after founder David McKernan put it up for sale.

In response to questions, Jeffrey Long, managing director of Java Republic, said the company would consider exploring acquisition opportunities in the coffee market with the support of its owner.

He said any acquisition would be aimed at driving future growth, given “likely consolidation in the sector in light of rising commodity prices and the evolving market”.

Commenting on Java Republic’s results for 2023, Long said it had been a strong year, with coffee sales up by nearly 7pc. The firm also improved sustainability, cutting its gas consumption by 32pc per kilo of coffee roasted and reducing CO2 emissions by 6pc.​

Long said Java Republic had a “challenging start” to its current financial year, but the second half was 6pc ahead on the previous year’s coffee volumes.

“Growth in cafes, hotels and large offices has been a highlight, and we’ve continued to innovate, from 100pc recyclable packaging to a zero waste to landfill operation. The food service market is challenged in certain channels and areas. However, we are seeing growth in new business across the country given our premium positioning and total solution offer.”

Soaring coffee bean prices look set to put pressure on the entire sector.

In December, global prices for raw coffee soared to record highs. They were up some 80pc last year due to adverse weather in important growing markets like Brazil and Vietnam, hitting crop outlook.

Consumers internationally are likely to feel the pinch as early as the end of March.

Long acknowledged the sector was facing challenges like rising costs and supply chain issues in the year ahead. Despite this, he was optimistic.

“While coffee prices hit 50-year highs and a gain of 85pc over the past year, our commitment to quality and service remains unchanged.

“The cost of roasted coffee is, however, only one variable in the price that consumers pay for a cup of coffee, with close to 10pc of the overall price being made up by the roasted beans. We’ll continue to prioritise producer relationships, operational efficiencies, and premium experiences for our customers.”

Java Republic will also be focusing on innovation as it looks to match shifting consumer demands. Long said new trends like cold coffee were booming, with orders growing by 75pc.

“We’re seeing a shift towards premium coffee and ethically sourced beans — trends that align perfectly with Java Republic’s long-standing values of quality and sustainability.”

Java Republic was founded by McKernan in 1999 and has grown into one of the country’s largest coffee and tea brands. The company employs over 70 staff, with more than 1,200 venues serving its products.

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