Tim Cofer’s Strategy: Why Keurig Dr Pepper Is Building a Coffee Giant
New York – August 27, 2025 (Qahwa World) – When Keurig Dr Pepper (KDP) unveiled its $18.4 billion acquisition of JDE Peet’s, the headline alone turned heads. But the deeper story lies in the reasoning of CEO Tim Cofer, who is reshaping the company by building a coffee powerhouse—only to spin it off as an independent entity while KDP doubles down on its soda and refreshment empire.
The move marks a sharp departure from the vision set in 2018, when Keurig Green Mountain merged with Dr Pepper Snapple in a $19 billion deal. The idea was bold: unite hot and cold beverages under one roof, controlling every category of nonalcoholic drinks on consumers’ shopping lists. That concept thrived during the COVID-19 lockdown, when KDP used AI insights from home brewers to anticipate surging demand for K-Cups, while also stockpiling Dr Pepper and Canada Dry. Sales boomed as consumers hoarded both coffee pods and sodas.
Yet the promise of synergy has faded. In Q2 2025, KDP’s soft drink revenues surged 10.7% compared with the previous year, but U.S. coffee sales fell 1.9% and international hot beverages dropped 3.8%. Rising coffee bean prices forced K-Cup price hikes, pushing consumers toward cheaper ground and instant coffee. Instead of a perfect fit, coffee became a drag on the business, and management faced the distraction of running two very different operations.
Cofer’s solution: scale and separation. By acquiring JDE Peet’s—home to brands like Jacobs, L’Or, and Peet’s Coffee retail stores—KDP will merge it with Keurig to create a transatlantic coffee giant generating nearly $16 billion in annual revenues split evenly between Europe and North America. Then KDP will spin off the coffee business to shareholders, giving it independence and sharper focus. The remaining KDP will center entirely on refreshment, managing more than 150 brands from Dr Pepper and 7Up to Snapple and Schweppes.
For Cofer, the decision is not about retreat but about unlocking potential. Coffee, he points out, is a $400 billion global market—one of the few products most people consider indispensable. But paired with sodas, it lacked the attention and resources it deserved. As a standalone company, it can pursue growth on its own terms. Meanwhile, KDP’s soda business can concentrate on taking market share from Coke and Pepsi, especially in restaurants, energy drinks, sports hydration, and trendy innovations like “dirty sodas,” which KDP introduced after spotting a viral TikTok craze.
The move reflects Cofer’s pedigree as a dealmaker. At Kraft and Mondelez, he mastered the art of integrating and separating global businesses, from the Kraft-Cadbury merger to snack acquisitions in Asia. At KDP, he has applied the same instincts, betting on bold moves like acquiring Ghost Energy and diversifying into premium categories. Now he is wagering that specialization, not diversification, will deliver long-term growth.
Investors are skeptical. KDP’s stock fell 11% on the day of the announcement, erasing billions in market value. But analysts note that coffee and sodas are fundamentally different businesses, with little overlap in distribution or strategy. Splitting them could, in fact, make both stronger.
If Cofer’s gamble pays off, KDP’s breakup will not just be remembered as a costly deal but as one of the defining strategic pivots in today’s beverage industry—creating two giants instead of one distracted hybrid.
