New Keurig Partner and Other Highlights from the 2024 Deutsche Bank dbAccess Global Consumer Conference
Today, Tim Cofer, CEO, and Sudhanshu Priyadarshi, CFO and President, International, presented at the Deutsche Bank dbAccess Global Consumer Conference in Paris. They shared their excitement and vision for the next chapter of growth at KDP – including the announcement of a new Keurig brand partner.
ICYMI – here are a few of the highlights:
1. Keurig Dr Pepper holds an advantaged position in a growing industry
Our presence spans all key beverage categories from dawn to dusk, and we adopt a consumer-led approach to identify growth potential in new demand spaces and premiumization areas. Importantly, our scale and differentiated assets – including our unique portfolio of iconic brands and multiple routes to market – allow us to remain agile and responsive to evolving consumer needs.
2. We are succeeding with innovation, partnerships and strategic distribution across refreshment beverages
Our iconic Dr Pepper brand has grown share for seven years in a row and has been recognized as the #2 soft drink in the US by volume, enabled by its ability to provide a one-of-a-kind treat and deliver new flavor extensions – such as Dr Pepper Creamy Coconut. Beyond our owned brands, we employ a flexible “buy, build and partner” strategy, enabling us to participate in large and quickly growing categories such as energy, premium water and sports hydration.
Our company-owned direct-store-delivery (DSD) network helps us get our beverages in the hands of consumers. Last week, we announced the acquisition of strategic assets from Kalil Bottling Co. that will create KDP’s first company-owned manufacturing, sales and distribution operations in Arizona.
3. The coffee category remains attractive, and we are pursuing multiple ways in to meet evolving coffee shop-inspired needs
Coffee shop culture and a growing love for cold coffee has spurred the evolution and popularity of a wide range of refreshing innovations, and we are introducing options to meet demands for those drinks through pod and brewer innovation, such as the upcoming K-Brew + Chill.
We continue to attract new brands to the Keurig system, and we announced a new partnership with Massimo Zanetti Beverage USA, a fourth-generation global coffee company with beloved brands Kauai Coffee®, Chock full o’Nuts® coffee and Hills Bros® coffee. Those brands will transition g to become official K-Cup pods, produced by KDP, later this year.
4. We have a long runway for growth in Canada and Mexico
Our International segment – largely comprised of Canada and Mexico – has grown its net sales since the merger at a strong high single digit rate, supported by strong brands with attractive category positions that are winning market share, fueled by consumer-driven innovation.
In Mexico, our portfolio is exclusively focused on cold beverages, anchored by market-leading Penafiel in mineral water. In Canada, our portfolio is more diversified among cold and hot beverages. Along with considerable innovation to support our base, we are actively building our presence in growth segments like RTD Alcohol and alcohol alternatives. Our international segment is poised to become a more meaningful part of our total company.
5. Our evolved strategy underpins financial ambitions that will drive the next chapter of KDP value creation
Our top-line ambitions are supported by an increased focus on continuous productivity, which should deliver more flexibility for us to fund high-quality reinvestment and to drive margin expansion. This should also support continued robust cash generation, with our strong discipline in allocating capital a core part of who we are as a Company. Though over time we aim to balance internal investments with returning cash to shareholders, our cash deployment approach is dynamic in any single period based on the opportunities at hand. This approach enables us to create more optionality and drive enhanced total shareholder return.