There is an extensive explanation for this wild and bizarre sequence at the Muppet Wiki. Here’s a bit of it:
In 1957, Jim Henson was approached by a Washington, D.C. coffee company to produce ads for Wilkins Coffee. The local stations only had ten seconds for station identification, so the commercials had to be lightning-fast — essentially, eight seconds for the commercial pitch and a two-second shot of the product.
From 1957 to 1961, Henson made 179 commercials for Wilkins Coffee and other Wilkins products, including Community Coffee and Wilkins Tea.
This bit of weirdness brought to me by fellow VHiver, Mike Barklage.