Remarks by CEO Tim Cofer on the Agreement to Acquire GHOST

Keurig Dr Pepper has entered into a definitive agreement to acquire GHOST Lifestyle LLC and GHOST Beverages LLC (collectively “GHOST”), a North America-focused lifestyle sports nutrition brand with a portfolio anchored by GHOST Energy. GHOST Energy is one of the fastest-growing RTD energy brands and is characterized by its unique brand identity, distinctive flavors and packaging and strong consumer appeal. During the Company’s Q3 earnings call today, CEO Tim Cofer expanded on the deal, noting the following:

“We have reached an agreement to purchase a majority stake in GHOST this year, to be followed by the acquisition of the remainder of the business in the first half of 2028. This transaction strengthens our position in the attractive energy drink category and accelerates our portfolio evolution towards consumer-preferred and growth-accretive spaces.

GHOST is young, versatile, and founder-led, with a nearly half a billion-dollar portfolio anchored by its leading energy drink, while also spanning supplements and an emerging presence in other LRB (liquid refreshment beverages) categories. The brand more than quadrupled in size over the last three years and remains one of the fastest growing in the energy category, thanks to its unique brand identity, distinctive flavors and packaging, cross-occasion appeal, and strong consumer engagement, including on-premise.

GHOST will complement KDP’s existing energy portfolio and substantially enhance our presence in the category. We see significant potential to further scale GHOST in collaboration with its founders, Dan Lourenco and Ryan Hughes, who will continue to lead the brand as part of KDP’s U.S. Refreshment Beverages unit. I’ve been very impressed with Dan and Ryan and their tremendous success to date.  More importantly, I share their vision for strong growth in the years to come. Together, we plan to take GHOST to new heights as we build out KDP’s platform-based approach to the energy category.

Now at $23 billion in size, energy remains one of the fastest growing, scaled categories in beverages, and enjoys multiple structural growth characteristics. These beverages satisfy a near-universal consumer need for energy and alertness, which is increasingly relevant in a world with significant demands on our time and attention. They appeal to consumers across all ages and demographics, including over-indexing to Genzennials. There is significant headroom for household penetration to grow versus other leading beverage categories. And, the category is still in the development stage of price pack architecture and channel diversity. All of these elements translate to a large total addressable market that we believe the category will grow into – and on which KDP is well-positioned to capitalize.

As energy drink consumption becomes more prevalent, the category is evolving to serve distinct consumer need states and occasions. This landscape lends itself nicely to a portfolio approach, which we have successfully employed in premium water to become the #2 share player. We are now using a similar playbook in energy, having accelerated our push into the category over the last 24 months with GHOST, C4, and Black Rifle energy. In addition to today’s GHOST announcement, we just signed a distribution agreement with Nutrabolt for Bloom RTD Energy.  Bloom is a highly promising, emerging and distinctive beverage brand with a female-oriented skew. Together, each of these brands can work in complementary ways to address consumer needs, while driving greater scale in the category and across our DSD infrastructure.

Beyond its strategic merits, the GHOST transaction is another good example of how we approach efficient capital deployment. Through an elegant deal structure, we are capturing the growth opportunity and paving the way for compelling financial returns, while retaining manageable balance sheet leverage and aligning long-term incentives.

Our chosen structure retains GHOST’s leadership team, reinforcing a unique element of KDP’s white space expansion strategy: our founder network. We work to keep visionary entrepreneurs at the helm of the brands they created while adding substantial scale and resources from KDP. In energy drinks, we have seen the value of this arrangement firsthand through our close relationship with Nutrabolt’s innovative leader, Doss Cunningham. With alignment and support from energy leaders like Doss, Dan and Ryan of GHOST, and others, we are building a formidable energy platform that will drive win-win outcomes for all involved.”