Keurig Dr Pepper
Keurig Dr Pepper Inc. is a publicly traded American beverage and coffeemaker company owned by German conglomerate JAB Holding Company with headquarters located in Burlington, Massachusetts, and Frisco, Texas. Formed in July 2018, with the merger of Keurig Green Mountain and Dr Pepper Snapple Group, Keurig Dr Pepper produces and distributes more than 125 hot and cold beverages. The company's Canadian business unit subsidiary operates as Keurig Dr Pepper Canada.
Through its Keurig division in Massachusetts, the company manufactures brewing systems; sources, produces, and sells coffee, hot cocoa, teas, and other beverages under various brands for its Keurig machines; and sells coffee beans and ground coffee in bags and fractional packs. Following the 2018 merger, the conglomerate also sells sodas, juices, and other soft drinks via its Dr Pepper Snapple division based in Texas.
Green Mountain Coffee Roasters was established in 1979. After regional and national expansion in the late 1980s, and an IPO in 1993, the company completed its acquisition of the brewing-machine manufacturer Keurig, Inc. in 2006, enabling rapid growth through the high-margin sales of its many varieties of single-serve K-Cup pods. In March 2014, GMCR changed its name to Keurig Green Mountain.
A publicly traded company from 1993 through 2015, Keurig Green Mountain was acquired by a group of investors led by JAB Holding Company in March 2016 for $13.9 billion in cash. Keurig Green Mountain became a privately held company for two years, and was an independent entity run by its pre-existing management team and a new CEO.
On July 9, 2018, Keurig Green Mountain acquired the Dr Pepper Snapple Group in an $18.7-billion deal. The combined company was renamed Keurig Dr Pepper, and traded publicly again on the New York Stock Exchange under the ticker "KDP" until 2020 when it switched to Nasdaq while retaining the same ticker. Shareholders of Dr Pepper Snapple Group own 13% of the combined company, with Keurig shareholder Mondelez International owning 13% to 14% of that fraction. JAB Holding Company owns the remaining 73-74%.
Since April 2024, the CEO of Keurig Dr Pepper has been Tim Cofer.
History
Beginnings
The original Green Mountain Coffee Roasters was founded in November 1979 by Doug and Jamie Baine in Waitsfield, Vermont In 1981, entrepreneur Bob Stiller purchased a two-thirds stake in the company after discovering its coffee at a Vermont ski resort. The store and cafe sold beans, grounds, and coffee to the public and a few restaurants. Stiller focused the company's production on roasting arabica coffee beans. By 1982, the company had around 30 employees, and moved its production facilities to Waterbury, Vermont.Stiller bought out his two partners for $100,000 and became sole proprietor of the company within two years of his original purchase, but it took four years to turn a profit. To grow the business, Stiller sold the coffee to high-end restaurants and gas stations alike, and gave out free samples as he could not afford advertising. In 1986, he launched a mail-order business which he advertised in gourmet magazines, and acquired his first supermarket-chain customer, Kings.
Stiller adopted technology to track customers' orders; to regulate roasting-heat levels appropriate to each bag; and to track distribution, manufacturing, sales, and personnel. By 1983, employees composted used coffee grounds at its retail stores, and by 1986, Green Mountain introduced its first organic coffee in a retail market test. The company became one of the largest suppliers of double-certified fair-trade and organic coffee in the world.
As American tastes in coffee changed, sales of Green Mountain roasted coffee beans grew. In 1991, GMCR had seven retail outlets, 1,000 wholesale clients, $11 million in sales, and $200,000 in profits. By 1993, the company had 2,400 wholesale accounts and sales of about $10 million, and Green Mountain Coffee Roasters, Inc. started trading publicly, under the ticker "GMCR". The company expanded its retail locations, food-service distribution, mail-order business, and wholesale business.
In 1994, Green Mountain began exporting to Canada and Taiwan. In the late 1990s, it broadened its national supermarket chain distribution, gas-station and convenience-store distribution throughout the northeast, and it sold its product on airlines and Amtrak, specialty coffee stores, and venues such as LL Bean, Weight Watchers International, and Staples.
Keurig and launch of K-Cups
In 1993, three engineering entrepreneurs from a Massachusetts start-up called Keurig approached GMCR about developing a single-cup coffee brewing system, marking GMCR's first investment in Keurig. In 1996, GMCR invested further in Keurig, buying a 35% interest in the company. The following year, GMCR became the first roaster to offer coffee in a K-Cup pod for the Keurig Single-Cup Brewing System; in 1998 Keurig delivered its first brewing system, designed for office use. The introduction of K-Cup pods enabled GMCR to compete in the single-serve coffee market, a segment previously dominated by traditional drip-brewed premium brands such as Starbucks.Also in 1997, a deal with Poland Spring opened the office-worker market by distributing Green Mountain Coffee to thousands of offices in the Northeast. In 1998, GMCR closed its 12 retail shops into focus on expanding direct-mail and online sales, its growing distributions to business offices and other national venues, and its wholesale market. That year, the company signed an exclusive deal with American Skiing Company, offered its first corporate gifts catalogue, sold its certified organic coffee in ExxonMobil's national and international On the Run convenience stores, and expanded its supermarket distribution to 500 stores. In 1999, it expanded its export market, including to Great Britain.
In 2000, Green Mountain reached an agreement to promote and sell fair trade coffee, committing to making at least 3% of its sales fair trade—certified by TransFair USA. In 2001, the company acquired Frontier Organic Coffee, and in 2002, it signed an agreement to sell fair trade coffee under the Newman's Own Organics label. In late 2005, GMCR reached a deal to sell its Newman's Own Organics Blend coffee in more than 600 McDonald's restaurants in New England and Upstate New York.
Acquisition of Keurig, Inc.
In 2006, Green Mountain had a 43% ownership of Keurig, Inc, which it accomplished by successively investing in and acquiring increasing percentage ownership the company between 1993 and 2003, helping to complete its full acquisition of the single-cup brewing systems manufacturer. The subsequent acquisition allowed Green Mountain to adopt a multi-brand portfolio, and multichannel distribution of brands in a variety of settings. The acquisition led to substantial revenue growth and facilitated a transition from deriving 95% of its revenue from its low-margin wholesale coffee business in the late 1990s, to deriving 95% of its revenue from the sale of K-Cup pods as of 2014.Green Mountain also acquired the four additional Keurig licensees in 2009 and 2010:
- In March 2009, it purchased Seattle-based Tully's Coffee brand and its wholesale coffee business for $40.3 million.
- In November 2009, it acquired the wholesale division of Canadian coffee provider Timothy's World Coffee for $157 million.
- In December 2009, it purchased the California-based Diedrich Coffee for $290 million.
- In 2010, Green Mountain Coffee bought the Canadian distributor, Quebec-based coffee services company Van Houtte, for $915 million. In 2010, GMCR Canada was founded, and officially became the Canadian Business Unit of Green Mountain Coffee Roasters, Inc. the following year.
In February 2011, Green Mountain announced an agreement with Dunkin' Donuts to make Dunkin' Donuts coffee available in single-serve K-Cup pods for use with Keurig Single-Cup Brewers. In addition, participating Dunkin' Donuts restaurants on occasion offer Keurig Single-Cup Brewers for sale. In March 2011, Green Mountain Coffee and Starbucks announced a similar deal whereby the latter would sell its coffee and tea in Keurig single-serve pods, and would in return sell Keurig machines in their stores as part of the deal.
Keurig Dr Pepper In Latin America
In 2008, Dr Pepper Snapple Group bought the Mexican soft drink company Manantiales Peñafiel, which was then renamed Grupo Peñafiel across the country. One of its most popular products in Mexico was Squirt, widely enjoyed as a mixer with tequila and cocktails.A decade later, in 2018, Keurig Green Mountain merged with Dr Pepper Snapple Group. After the merger, Keurig Dr Pepper started operating in Mexico under the name Grupo Peñafiel, managing its brand portfolio in the country and expanding for the first time into the Mexican and Latin American markets.
New brewers, and company name change
Green Mountain Coffee Roasters introduced the Keurig Vue brewer, paired with its new Vue packs, in February 2012, seven months before patents on the K-Cup expired in September 2012. The Vue system was announced as having customizable features so consumers had control over the strength, size, and temperature of their beverages, and the Vue pack is made of recyclable #5 plastic. In November 2012, GMCR released its espresso, cappuccino, and latte brewer, the Rivo, co-developed with the Italian coffee company Lavazza. In the fall of 2013, the company released a full-pot brewer, the Keurig Bolt, for use mainly in offices.In February 2014, The Coca-Cola Company purchased a 10% stake in the company, valued at $1.25 billion, with an option to increase their stake to 16%, which was exercised in May 2014. The partnership was part of Coca-Cola's support of a cold beverage system to be developed by Keurig that allows customers to make Coca-Cola and other brand soft drinks at home. In January 2015, the company made a similar deal with Dr Pepper Snapple Group, but without a stockholder stake.
In early March 2014, Green Mountain Coffee Roasters shareholders voted to change its name to Keurig Green Mountain to reflect its business of selling Keurig coffee makers. Its stock-market symbol remained "GMCR".
In the fall of 2014, Keurig Green Mountain introduced the Keurig 2.0 brewer, with technology to prevent old or unlicensed pods being used in the brewer. The digital lock-out sparked hacking attempts and antitrust lawsuits. The 2.0 brewer also has the capacity to brew full carafes in addition to single servings, via the use of the new K-Carafe portion pack.
In March 2015, it launched the K-Mug pod, a recyclable pod which brews large travel mug–sized portions. In mid 2015 Keurig debuted the K200, a smaller Keurig 2.0 model that can brew single cups or four-cup carafes and comes in a variety of colors. General Electric announced that its new Café French Door refrigerator, due out in late 2015, would have a Keurig coffee machine built into the door.
In September 2015, Keurig launched a line of Campbell's Soup available in K-Cups. The kits come with a packet of noodles and a K-Cup pod of soup, and the varieties include Chicken Noodle and Southwest Style Chicken Noodle.
Also in September 2015, Keurig launched Keurig Kold, a brewer which created a variety of cold beverages including soft drinks, functional beverages, and sparkling waters. The machine brewed beverages from The Coca-Cola Company and the Dr Pepper Snapple Group, in addition to Keurig's own line of flavored sparkling and non-sparkling waters and teas, sports drinks, and soda-fountain drinks. The company's primary competitor in this market area was SodaStream. In June 2016 Keurig announced it was discontinuing the machine and offered refunds to purchasers.