Name: How Keurig Dr Pepper's $15B Empire Beat Out Pepsi
Uploaded: 2025-06-02
Duration: 7 min 43 s
Description: Fortune sits down with Keurig Dr Pepper CEO Tim Cofer to explore how the $15B beverage giant is outpacing rivals like Pepsi. Cofer breaks down the company’s bold strategy—expanding in energy drinks, innovating in coffee with plastic-free K-Rounds, and navigating inflation and tariffs. Here's how KDP is rewriting the rules of the beverage business under its new leadership.

Fortune sits down with Keurig Dr Pepper CEO Tim Cofer to explore how the $15B beverage giant is outpacing rivals like Pepsi. Cofer breaks down the company’s bold strategy—expanding in energy drinks, innovating in coffee with plastic-free K-Rounds, and navigating inflation and tariffs. Here's how KDP is rewriting the rules of the beverage business under its new leadership.

How Keurig Dr Pepper's $15B Empire Beat Out Pepsi

Features

Fortune sits down with Keurig Dr Pepper CEO Tim Cofer to explore how the $15B beverage giant is outpacing rivals like Pepsi. 

You may not know it, but all the drinks here are owned by just one company, Keurig Dr. Pepper. We have a dawn to dusk portfolio that literally covers every demand space and every need that a consumer has in terms of beverages. KDP generated $15 billion in revenue last year. We put the consumer at the center of everything we do here at Keurig Dr Pepper with both legacy brands. Like Green Mountain and newer brands like Ghost Energy, they've invested a lot to keep up. What up y'all? I got my hands on the new Dr. Pepper BlackBerry. Let's try this. Having that relationship with the consumer, understanding what's important in their lives, understanding the cultural moments that really define that younger generation, Gen Z. and then tapping into it in a very authentic one of a kind way. Smash or pass. Classic Dr. Peppermash. And though Dr. Pepper just overtook Pepsi as the 2nd best selling soft drink in North America, their coffee business is cooling off. Can Keurig Dr. Pepper re up another wave of growth. Yeah, this is one that I really like, although I always get the bottles. The big news is that Dr. Pepper has just gone to #2 among all soft drinks. The milestone that you just referenced is one that's been really years in the making. I think it's a combination of many factors. I point to innovation. I'd point to marketing and sales excellence. This is a brand unique, one of a kind, oldest soda brand in America since 1885, but a really unique personality. In 1885, 1 year before the birth of Coca-Cola, a pharmacist in Waco, Texas famously mixed 23 soda fountain syrups in an experiment to recreate the drugstore's aroma. The blend became Dr. Pepper. Fast forward 140 years, the soda is one of the most popular in North America, and in 2018, Keurig Green Mountain and Dr. Pepper Snapple Group merged in a nearly $19 billion deal to form Keurig Dr. Pepper. All right, here's some cold beverage. Let's look at some of these. Today the Beverage Powerhouse has over 125 hot and cold drink brands, and in recent years, Dr. Pepper has seen a surge in popularity. Y'all, we can make us a dirty soda. Let's make a dirty soda just like the Mormons do. Dirty soda. It's been a thing in Utah for years where people started spiking soda with everything from cream to flavored syrup. Delish. All right, that's it. Goodbye. You have appealed to a much younger audience here. Was that an intentional strategy? How did that happen? We put the consumer at the center of everything we do here at Keurig Dr. Pepper, having that relationship with the consumer, understanding what's important in their lives. Understanding the cultural moment really defining that younger generation Gen Zennials, that was kind of the impetus of us picking up on this dirty soda trend and that allowed us to drive that great new innovation really winning marketing across the patch. Here's our ghost lineup C4, that performance brand, fitness brand, Bloom, a more female forward brand started by a young lady and then Black Rifle veteran focused. The energy drink market has exploded in recent years, fueled by a younger demographic, wellness trends, and a demand for functional beverages once dominated by. Red Bull and Monster, the category is seeing new players. Cur Dr. Pepper, historically absent from the core energy segment, is now making strategic moves to catch up. What we saw a few years ago is an opportunity to continue to shape our portfolio in a way that would be more growth accretive. We love our position in carbonated soft drinks. We knew there were other verticals like energy, like sports hydration, where we had an opportunity to participate more meaningfully. And so energy is our is our latest big bet. 3 years ago we were nonexistent in energy. Today we have over a 6 market share, and I have an ambition to be a double digit market share player here in a couple of years. One of Keurig Dr. Pepper's competitive advantages is DSD, its direct store delivery network. While many beverage companies rely on third party distributors, KDP owns and operates a vast logistics system that delivers products directly to retail shelves. In the beverage industry, DSD direct store delivery, is a scarce asset and it's a critical asset because the consumer is looking for that beverage wherever she shops and needs it right then and ideally needs it cold, right? So DSD direct store delivery is a big source of competitive advantage and it's one of the reasons why we attract so many partners, partners who might not have that critical distribution. One of the highly unusual things about the company was the combination of hot and cold. What power did you see in that combination? You know, I'd start once again at a consumer level. We have a dawn to dusk portfolio that literally covers every demand space and every need that a consumer has in terms of beverages. This is one of our newest brewers in terms of the intersection of hot and cold. This is called the K Brew and Chill. This is the first brewer that actually makes cold coffee to the touch. As COVID began, KDP used data from home coffee makers to foresee a spike in demand after a sudden shift to the stay at home economy. The then CEO ramped production and secured big shipments of cans well before rivals saw the way of building, but as more Americans returned to offices and cafes, demand for at-home coffee began to soften. We love our coffee business. We have over a $4 billion coffee business, and coffee remains today a ubiquitous category. In fact, coffee is second only to water as the most consumed beverage today. Indeed, to your point, however, of late, you've seen coffee under pressure, and so we're really playing the long game on coffee. Coffee will come back and when it does, we're going to be really well positioned to capitalize it, including a revolutionary new system that we'll be launching here in the next year or so. So this is KA Sean, the new system. This is obviously a prototype we're actually just went into beta testing in consumer homes. No plastic, no aluminum, 100% coffee you can. I mean, smell that. That's just nothing but coffee. With a plant-based coating. We're disrupting ourselves with a sustainable option that is plastic-free, aluminum free K rounds. As the beverage landscape evolves, Keurig Dr. Pepper is betting that a diversified portfolio and a powerful distribution engine will keep it competitive even as consumer tastes continue to shift. Give that a try. So it's your favorite ginger ale with a real splash of cherry juice. It's terrific.