Beverage maker Keurig Dr Pepper (KDP) announced a management transition plan that will see CFO Ozan Dokmecioglu take over as CEO from Bob Gamgort, who is set to move into the role of Executive Chairman for two years. The change will become effective July 29, 2022.
According to his company biography, Dokmecioglu served as CFO at Keurig Green Mountain beginning in 2016, before the company’s 2018 merger with Snapple Dr Pepper. He has previously served as Vice President Finance, CFO North America at The Kellogg Company.
“I am honored to assume the role of KDP CEO at this important time for our Company and look to the future excited by the enormous potential that lies ahead,” said Dokmecioglu in a statement. “I am grateful for the ongoing partnership with Bob and the support of our Board of Directors and leadership team, as we continue to work together to drive outsized value creation.”
As CEO, Dokmecioglu will “lead the execution of the Company’s strategy and ensure continued operational excellence.” Meanwhile, Gamgort, as Executive Chairman, will “lead the Board of Directors and oversee the deployment of KDP’s significant discretionary cash flow.” The process for recruiting a new CFO is underway, the company added.
As CEO, Gamgort guided the company in its three-year period after beverage maker Dr Pepper Snapple Group and Vermont-based Keurig Green Mountain, best known for its pod-based coffee machines, announced their merger in 2018. During that time, KDP continued to expand its beverage interests outside of soda, teas and coffee through M&A — including its $525 million acquisition of water brand CORE in 2018 — and securing a long-term manufacturing and distribution agreement with Massachusetts-based Polar Beverages. According to the release, Gamgort will remain “a significant investor in KDP, maintaining at least half of his KDP shareholdings during his tenure as Executive Chairman.”
Morgan Stanley analyst Dara Mohsenian noted that investors could view the departure negatively because it was “sooner than the market expected” and “given how highly regarded he is with investors, although his agreement to stay on as Executive Chairman should help partially allay concerns.”
“I am excited to partner with Ozan, our leadership team and the KDP Board of Directors to drive continued growth and value creation. As we move into the next chapter for our modern beverage company, we’re establishing a leadership team that can guide the success of KDP well into the future,” said Gamgort in a statement.
A report from Goldman Sach Equity Research acknowledged the concerns from investors, but the analysts predict a “seamless transition” as Dokmecioglu assumes the new role. In particular, the report highlighted his close working relationship with Gamgort through “critical phases of KDP’s private/public existence,” including the take-private transaction of Keurig Green Mountain in 2016 and the company’s merger with Dr Pepper Snapple Group.
“While the announcement may come as a disappointment to some (given how well-regarded Gamgort is), we note that this transition is occurring 3-years after the combination & integration of Keurig and Dr Pepper and the successful deleveraging of the company,” the report stated. “[W]e’re optimistic that Dokemcioglu is taking over the reigns at a point when KDP is entering its next phase of growth with a stronger foundation.”
In its most recent earnings report, KDP reported an 8.7% net sales increase for Q4 2021 and 9.2% growth to $12.6 billion for the full year.
Paul Michaels, KDP Lead Independent Director, added: “We are pleased to appoint Ozan as our next CEO after a thorough succession planning process, including the consideration of internal and external candidates. Ozan is an exceptionally strong leader with the skills, experience, values and perspective to lead KDP into the future. We are also fortunate to have Bob in a position to continue working closely with Ozan and the leadership team over the next few years.”