Keurig Dr. Pepper is expanding across several beverage lanes.
Boston — Michael Phelps, the gold medallist at the Olympics, might not agree, but Robert J. Gamgort prefers to swim in different lanes. When Mr. Gamgort, the chief executive officer of Keurig Dr Pepper, Inc., spoke on September 6 at the Barclays Global Consumer Staples Conference in Boston, he was discussing diversifying into other beverage categories.
Following Keurig Green Mountain, Inc.’s acquisition of the Dr Pepper Snapple Group, Inc. to form Keurig Dr Pepper, the business adopted that tactic in 2018.
According to Mr. Gamgort, “our approach to beverage at that time was creating a company that looked at beverage holistically.” “We believed that people were overstaying their welcome in the swim lanes in the past. Since the idea of blurring the lines was novel at the time and is undoubtedly discussed frequently, we believed that there was a lot of interest and growth on the periphery.
According to Mr. Gamgort, he anticipates beverage companies to continue diversifying into new markets over the next five years.
“Now you see people are doing that, not only between alcohol and non-alcohol, but also between hot and cold,” he remarked. “I believe it to be incredibly relevant today.”
In December 2022, Keurig Dr Pepper and Nutrabolt announced a partnership that included a sales and distribution agreement. According to this agreement, Keurig Dr Pepper will be the distributor and seller of the C4 Energy drink in most of its company-owned direct-store distribution territories. Mr. Gamgort stated that Keurig Dr Pepper still has room to grow in the energy drink market with less than a 5% share.
“In the energy sector, we’re in a great position,” Mr. Gamgort stated. Its size is doubling, and we’re thrilled about that.
Keurig Dr Pepper and La Colombe announced in July of this year that they had reached a sales and distribution agreement for La Colombe’s ready-to-drink coffee as well as a manufacturing, distribution, and licensing agreement for K-Cup coffee pods bearing the La Colombe brand.
Additionally, Mr. Gamgort stated, “We know that ready-to-drink coffee is a big factor.” “We have a strong DSD distribution system here. Through our partnerships, we are able to access fantastic plans, but we haven’t had much luck staying focused on providing its ready-to-drink coffee.
We are thrilled to announce that we are currently developing a ready-to-drink coffee platform. There are those among us who are committed to that. Although the Peet’s brand exists, it hasn’t really been activated.
Keurig Dr. Pepper is getting ready for potential economic downturn.
“I think that throughout my career, every significant disruption has been something no one anticipated,” Mr. Gamgort stated. “Therefore, this would be the most anticipated recession in history, and generally speaking, predictions that are widely accepted don’t come to pass.”
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As inflation slows down in 2024, he anticipates lower prices. Elasticity varies according to the type of beverage.
It’s interesting that the category where we’ve seen the least amount of elasticity is carbonated soft drinks, he said. One of my theories is that this started out with a value that was too good. It was priced too low.