Keurig Dr Pepper (KDP) is beefing up its DSD wing with the acquisition of Arizona-based Kalil Bottling Co., in a deal that gives the beverage strategic control of all production, sales and distribution assets and its first facility in the Grand Canyon State.
Announced on Friday, the acquisition is expected to close in Q3 2024 and financial terms of the deal were not disclosed.
Kalil owns a manufacturing facility in Tucson and has sales and distribution centers in Tucson and Tempe, with around 425 employees across all sites expected to join KDP following the close of the deal. According to a press release, the acquisition gives KDP’s DSD arm new bottling and distribution rights in Arizona for brands such as Canada Dry, 7UP, A&W root beer, Snapple and Core Hydration, representing around 4,500 retail locations.
“Amplifying our route to market advantage is a key investment priority for KDP, and this strategic move will extend our system’s reach while providing us more direct insight into the local consumer base and stronger retail collaboration,” said KDP CEO Tim Cofer in a statement.
A legacy bottler founded 76 years ago, Kalil currently services a number of KDP owned and aligned brands, including La Colombe, C4, Polar Seltzer and Bai, as well as independents like 5-Hour Energy and tea brand AriZona.
The deal marks the first acquisition by KDP under new CEO Tim Cofer, who previously served as COO before assuming the chief executive role this spring, taking over for outgoing CEO Bob Gamgort.
During KDP’s Q1 earnings call in April, Cofer laid out the company’s “five pillar” strategy, which includes brand-building, portfolio expansion, strengthening of distribution, cost optimization and investment.
KDP has been active in investing in brands over the past several years, placing an $863 million stake into C4 Energy producer Nutrabolt in late 2022, a $300 million investment and distribution pact with La Colombe last year, and a long-term distribution deal with hydration brand Electrolit in October.
But it’s been longer since the conglomerate last added to its distribution network, having last acquired Red River Beverage Group and The Made-Rite Company, regional distributors respectively based in Texas and Louisiana, in 2020.