Healthy growth from its revamped U.S. Refreshment Beverage division helped Keurig Dr Pepper (KDP) offset sluggishness in its coffee segment, and deliver the company a 4.8% increase in net sales during Q1 2025, as detailed in a quarterly earnings report this morning.
“Our first quarter performance represented a strong start to the year,” said CEO Tim Cofer in a statement. “We delivered healthy top- and bottom-line growth, driven by momentum in key categories and brands, high-quality commercial execution, and disciplined expense management.”
In U.S. Refreshment Beverages, net sales jumped 11% ($2.3 billion) against an 8% increase in volume, including a 4.8 percentage point contribution from GHOST. Pricing rose 3%.
Cofer noted KDP’s “thoughtfully constructed” energy drink portfolio – highlighted by GHOST, plus distribution deals with brands like C4, Black Rifle and Bloom — as another bright spot, currently holding a 6.5% market share with “momentum building.”
Elsewhere, KDP’s distribution pact with Mexican sports drink brand Electrolit (Grupo PiSA) has produced “significant and accelerating share gains” for the brand, which is currently constructing a U.S. manufacturing site in Texas.
But the company’s CSDs continue to be its workhorse. The latest flavor innovation, Dr Pepper Blackberry, is “on par with some of the strongest innovations over the last few years,” said Cofer, having picked up nearly 1 point of market share just eight weeks after launching in February.
Cofer also praised KDP’s “dynamic capital allocation strategy,” as seen through the sale of its minority stake in Vita Coco in Q1. The sale helped boost adjusted diluted EPS 10.5% to $0.42, a realized gain that provides “flexibility in balance of year to manage all the consumer headwinds and tariffs,” per a transcription of remarks from Sudhanshu Priyadarshi, KDP’s chief financial officer.
“Overall, we’re very pleased with our U.S. refreshment beverages performance,” Cofer said. “Our portfolio has momentum. We are executing at a high level, and we have strong commercial plans for the rest of 2025.
KDP’s U.S. coffee business was weaker in Q1, though, behind a 3.7% net sales decline. Inflated green coffee prices remain sticky, and the company hasn’t ruled out another round of price increases, following one last year. It has responded by seeking closer ties with premium roasters like Lavazza, whose licensed K-Cup pods grew sales 30% in Q1. Meanwhile, its distribution partnership for La Colombe’s RTD coffees “continued to scale nicely in the quarter,” Cofer said.
The company is maintaining its full-year guidance for 2025.
The earnings release coincided with the appointment of two new members to KDP’s board of directors: Mike Van de Ven, a former President and COO at Southwest Airlines, and Lawson Whiting, the current President and CEO of the Brown-Forman Corporation. The company also announced that Bob Gamgort’s role has progressed from Executive Chairman to non-executive Chairman of the Board.