Dive Brief:
After seven years of operating as a single entity, Keurig Dr Pepper is now undergoing a split.
Dive Insight:
The initial merger aimed to combine traditional sodas, coffee beverages, and healthier drink options under one roof. The company sought to leverage its extensive distribution network and diverse product range to cater to consumer needs throughout the day.
However, changes in the industry landscape have prompted the decision to split. Challenges in the coffee sector, including increased competition, rising bean prices, and tariffs on Brazilian goods, have impacted Keurig Dr Pepper’s coffee business.
Net sales for the coffee division decreased in 2024 but saw a slight recovery in the second quarter of 2025. The planned merger with JDE Peet will create a coffee powerhouse with a global presence and annual net sales of $16 billion.
The remaining beverage unit, focusing on soda, tea, water, and energy drinks, is expected to generate over $11 billion in annual net sales. Recent performance highlights the strength of the beverage segment, with net sales increasing due to popular products like Dr Pepper and energy drinks.
CEO Tim Cofer views the split as a transformative moment in the industry, positioning both companies for success. The beverage company will be led by Cofer, while Sudhanshu Priyadarsh, CFO of Keurig Dr Pepper, will oversee the coffee spinoff.
Since the merger, Keurig Dr Pepper has expanded its product portfolio and market presence, investing in trendy beverage categories like energy drinks and nonalcoholic beer. Strategic acquisitions, such as Ghost and Nutrabolt, have strengthened the company’s position in the market.
Additional investments in brands like La Colombe and Athletic Brewing showcase Keurig Dr Pepper’s commitment to innovation and growth in the beverage industry.