BURLINGTON, MASS. — The sluggishness of the US at-home coffee market in 2023 prompted Keurig Dr Pepper Inc. to temper its category expectations in 2024. Despite the weakness in the company’s second-largest business unit, it did post positive results for its fiscal year ended Dec. 31, 2023.

Volume consumption in the at-home coffee category declined approximately 3% in calendar 2023 based on Circana tracked channels, according to Keurig Dr Pepper. As a result, the company’s US Coffee business segment saw its full-year net sales fall 5.4% to $4.1 billion and its volume/mix for the year decline 7.9%.

Single-serve coffee pod sales decreased 3.6% during the year driven by a pod shipment decline of 5.1%. Coffee brewer shipments totaled 9.7 million during the year, declining 10.3% when compared to 2022 amid a softer demand environment, according to the company.

US Coffee segment adjusted operating income decreased 4.4% during the year to $1.3 billion.

During a Feb. 22 conference call with securities analysts to discuss Keurig Dr Pepper’s financial results, Robert J. Gamgort, chairman and chief executive officer, said the US at-home coffee category sluggishness wasn’t attributable to market volatility.

“… the volatility was really driven by our expectations of a rebound,” he said. “If you look at the actual trends beneath it, they’ve been pretty steady. Unfortunately … much slower than we originally anticipated.”

He added that the trend is manifesting in nearly every developed market.

Keurig Dr Pepper’s guidance for fiscal 2024 is to deliver mid- to single-digit constant currency net sales growth and high single-digit earnings per share growth.

“Our plans reflect continued strong momentum in our US Refreshment Beverages and International segments, while contemplating a relatively muted contribution from US Coffee,” said Sudhanshu Shekhar Priyadarshi, chief financial officer and president of the International business unit.

 It was the performance of the US Refreshment Beverages and International businesses that propelled the company in fiscal 2023. Net income for the year was $2.2 billion, equal to $1.56 per share on the common stock, and an improvement over net income of $1.4 billion, or $1.01 per share, in 2022.

Part of the company’s earnings growth was attributable to lapping a $477 million impairment charge taken in fiscal 2022. Also supporting earnings were pricing actions taken during the year and productivity savings that were nearly double what they were in fiscal 2022, according to Keurig Dr Pepper.

Company sales rose to $14.8 billion from $14.1 billion during the year.

In the US Refreshment Beverages business sales rose 8.1% to $8.8 billion and were driven by net price realization of 9.6% that was slightly offset by a decline in volume/mix of 0.5%.

Adjusted operating income increased 13.9% to $2.6 billion.

“Our US Refreshment Beverages business model is well suited to a dynamic macro environment,” Gamgort said. “The breadth of the beverage occasions we serve and the depth of our distribution allow us to spot changing consumer trends with speed. We then flex our plans to deliver on the key tenets of our growth strategy, driving category growth, market share gains and white space expansion regardless of the operating environment.”

International business segment sales rose 15% during the year to $1.9 billion. Net sales advanced 10.5%, supported by net price realization of 5.5% and volume/mix growth of 5%.