Westrock Coffee Company $WEST ( ▲ 2.6% ) is a struggling coffee supply chain company betting its future on cold brew extracts and ready-to-drink products while burning cash and carrying heavy debt. It's either a compelling turnaround story or a cautionary tale about SPAC investing gone wrong.

This guide from Deel breaks down how to build one global hiring system. You’ll learn about assessment frameworks that scale, how to do headcount planning across regions, and even intake processes that work everywhere. As HR pros know, hiring in one country is hard enough. So let this free global hiring guide give you the tools you need to avoid global hiring headaches.

Download the free guide today

Think of Westrock as the ultimate coffee middleman – but in the best possible way. They're what's called a "brand-behind-the-brand," meaning when you grab that perfect cold brew from your favorite coffee shop or pick up a private-label coffee bag at the grocery store, there's a decent chance Westrock had a hand in making it happen.

The company operates like a coffee concierge service for major brands. They handle everything from sourcing beans directly from farmers in places like Rwanda and Peru, to roasting, flavoring, packaging, and delivering finished products. It's like having a personal assistant for your entire coffee supply chain – except this assistant speaks fluent "supply chain optimization" and has offices on three continents.

Their Two-Pronged Approach:

Beverage Solutions ($659M revenue ↘️): This is the customer-facing side where they create everything from single-serve K-cups to ready-to-drink cold brew cans. They're particularly excited about liquid extracts and RTD (ready-to-drink) products because apparently Millennials and Gen Z prefer their coffee cold and convenient. Who knew? 🤷‍♀️

Sustainable Sourcing & Traceability ($191M revenue ↗️): This is where they get fancy with technology, claiming they can trace individual coffee lots "from farm to cup." They operate more like commodity traders here, buying and selling green coffee beans while supposedly improving farmers' lives through their various empowerment programs.

What makes them different is their obsession with traceability. They've built proprietary technology that tracks coffee beans through every step of the journey. It's like having a GPS tracker for your morning caffeine fix – which sounds either really cool or slightly creepy, depending on your perspective.

Westrock operates in the brutally competitive coffee industry, where they're basically David fighting multiple Goliaths. Their main competitors include heavyweights like Keurig Dr. Pepper (yeah, the soda people who also dominate coffee), TreeHouse Foods, and a bunch of other companies you've probably never heard of but definitely consume products from.

The Good News: They've carved out a nice niche as the "innovation partner" for major brands. Instead of just selling commodity coffee, they position themselves as the company that helps brands create new products and enter new markets. Think of them as the R&D department that major food companies rent instead of building in-house.

The Reality Check: The coffee industry is notoriously difficult, with razor-thin margins and constant pressure from commodity price swings. Coffee beans are traded like oil or gold, meaning prices can swing wildly based on weather in Brazil or political instability in Colombia. Fun times! ☕

Their competitive advantage supposedly lies in their international footprint (facilities in North Carolina, Arkansas, and Malaysia, plus trading offices scattered across coffee-growing regions) and their technology platform. Whether this actually translates to sustainable competitive advantages remains to be seen, especially given their current financial struggles.

The company serves some major customers – one unnamed client represented 10.4% of their 2023 revenue (about $90 million). The fact that they won't name names suggests these are probably household brands that prefer to keep their supply chain relationships quiet.

Here's where things get... interesting. And by interesting, I mean concerning.

Revenue Breakdown:

The Troubling Trends: Revenue has been essentially flat-to-declining over the past three years ($868M → $865M → $851M). That's not exactly the growth story you want to see, especially from a company that went public via SPAC in 2022 presumably promising explosive growth.

Margin Madness:

The Volume Story:

Cost Structure Reality: They spent $185M on selling, general & administrative expenses (21.8% of revenue), plus another $14M on "transaction, restructuring and integration" costs. Translation: they're spending a lot of money trying to fix their business while also paying for the privilege of being a public company.

The company is betting big on their new Conway, Arkansas facility for extract and ready-to-drink production, investing about $50M more to complete it. This is either going to be their salvation or an expensive mistake – time will tell.

The Verdict: Potentially Undervalued (But Risky as Hell)

Key Assumptions:

One-Line Recommendation: High-risk speculation that could pay off if management executes a successful turnaround, but equally likely to result in significant losses.

Bull Case 🚀

Bear Case 🐻

The Bottom Line: This is essentially a turnaround story disguised as a growth company. The business model makes sense, and there are genuine opportunities in cold coffee and extract products. But the financial situation is precarious, and management needs to execute flawlessly to avoid potential disaster. It's not an investment for the faint of heart or anyone who needs their money back anytime soon.

Critical Metrics:

Upcoming Catalysts:

AI-written, human-approved

Disclaimer: This guide is for informational purposes only and does not constitute financial advice, investment recommendations, or an offer or solicitation to buy or sell any securities. The information contained in this report has been obtained from sources believed to be reliable, but StrataFinance does not guarantee its accuracy, completeness, or timeliness.