Keurig Dr Pepper’s (KDP) U.S. beverage portfolio helped the company stick the landing for the first half of 2025, announcing total net sales up 6.1% to $4.2 billion in its Q2 earnings report this morning.
“Our Q2 results cemented a strong first half of the year, as we drove robust performance in U.S. Refreshment Beverages, good growth in International, and sequential progress in U.S. Coffee,” said CEO Tim Cofer in a statement. “Today’s dynamic environment puts a premium on operational excellence, which we are demonstrating while pushing ahead on our multi-year strategic agenda. Though the back half will present new challenges, we are on track to deliver our 2025 outlook and are confident in the long-term value creation ahead.”
Net sales of KDP’s U.S. Refreshment Beverages division were up 10.5% to $2.7 billion in the quarter, with volume/mix growth of 9.5% with gains reported in soft drinks, energy and sports hydration.
However, U.S. coffee struggled in the quarter, with net sales down by 0.2% to $0.9 billion. Net price realization of 3.6% was undercut by a volume/mix slide of 3.8%. International sales also lagged, down 1.8% to around $0.6 billion.
Total volume/mix was a solid 5% in the quarter, with the acquisition of energy lifestyle brand Ghost contributing 4 percentage points, the company said, as RTDs are contributing significantly to KDP’s overall business.
On an earnings call with investors and analysts this morning, Cofer made a surprise announcement that KDP has acquired drink mix manufacturer Dyla Brands, maker of the Stur brand as well as numerous licensed and co-branded flavors.
“This small tuck-in builds on our productive multiyear partnership as a minority investor,” Cofer said. “Now with full ownership, we will leverage Dyla’s know-how and capabilities to expand our presence in an attractive and growing category, including by extending more KDP brands into the space.”
Responding to a question, Cofer noted that Dyla has reported a consistent double-digit CAGR for “many years,” and the company intends to use the acquisition to extend the platform for its existing brand portfolio.
“It’s unlikely to move the needle on enterprise trends, but we’re excited to welcome our new friends from Dyla, the talented team there and to partner closely to further expand our beverage industry leadership,” he said.
Besides Dyla, Cofer said that energy drinks continue to be a “major focus” for KDP with its multi-brand approach with Ghost, C4, Black Rifle and Bloom combining to provide over $1 billion in annual run rate. The Bloom brand will also serve as the company’s entry into the prebiotic soda segment with Bloom Pop, scheduled to launch during Q3.
Cofer also offered an update on KDP’s DSD distribution ambitions, following the acquisition of a bottling and distribution facility in Arizona last year. The company will add the Dr Pepper brand to its DSD portfolio in California and Nevada, and “certain areas in the Midwest” later this year to help “directly influence point-of-sale trends, drive greater efficiencies across our DSD network and generate halo effects that benefit our other DSD brands.”
“Consistent with our third strategic pillar, we are amplifying our route-to-market advantage, particularly in DSD,” Cofer added. “This starts with investing in our existing system, including through enhanced digital tools, and continues with selected network expansion opportunities.”
In coffee, Cofer touted “sequentially improving trends” for the business during Q2, noting improvements in K-Cup pod sales and strong RTD performance, despite continued challenges.
“This superior La Colombe brand continues to generate triple-digit retail sales growth as it attracts new and younger consumers to the category,” he said.