Keurig Dr Pepper to Split into Coffee and Soda Businesses Amid Underperformance

Keurig Dr Pepper CEO Bob Gamgort united hot and cold beverages in 2018. The COVID lockdown fueled sales, but the coffee side is now a drag, with U.S. coffee sales falling 1.9% in Q2. The company is splitting the coffee and soft drink franchises, purchasing JDE Peet's and creating a global coffee colossus. Afterward, it will spin off the coffee franchise and focus on soft drinks.

Keurig Dr Pepper, a leading beverage company, has announced a strategic move to separate its coffee and soft drink franchises, with a significant acquisition of Dutch coffee company JDE Peet’s NV. The company will pay €15.7 billion ($18.4 billion) for JDE Peet’s, which will be split into two standalone entities: Global Coffee Co. and Beverage Co. [1][2][3][4]

The acquisition aims to enhance Keurig Dr Pepper's coffee positioning and create a global coffee champion. JDE Peet’s, with its extensive portfolio of coffee and tea brands, will be integrated into Global Coffee Co., which is expected to become the world’s second-largest coffee company. The company anticipates $400 million in cost savings and expects the deal to be additive to its bottom line in the first year of the union [1][2][4].

The separation of the two businesses is forecasted to complete by the end of 2026, providing strategic clarity and competitive distinction. Keurig Dr Pepper CEO Tim Cofer will lead Beverage Co., while Sudhanshu Priyadarshi, the current CFO, will head Global Coffee Co. [3][4]

The decision to split the company follows a period of underperformance in the U.S. coffee market, where sales fell by 1.9% in Q2. The separation allows Keurig Dr Pepper to focus on its strong cold beverages business, which has seen growth amidst the COVID-19 pandemic [1][2].

The acquisition and subsequent separation mark a significant transformation for Keurig Dr Pepper, which initially merged Keurig Green Mountain with Dr Pepper Snapple in 2018. This move aims to unwind the merged structure and provide focused efforts for the beverage and coffee segments, each employing strategies tailored to their unique market conditions [4].

References:
[1] https://sherwood.news/markets/keurig-dr-pepper-acquisition-jde-peets-coffee-soft-drink-split-up/
[2] https://www.bloomberg.com/news/articles/2025-08-25/keurig-dr-pepper-to-buy-jde-peet-s-in-18-billion-coffee-deal
[3] https://finance.yahoo.com/news/keurig-dr-pepper-acquire-jde-204158727.html
[4] https://www.ainvest.com/news/keurig-dr-pepper-15-7-billion-acquisition-jde-peet-promises-strategic-growth-2508/