| Metric [Unit: $ million] | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2022 |
|--------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| U.S. Refreshment Beverages | **2,007**  **[0001418135-23-000009_kdp-20230331.htm:15]**  | **2,330**  **[0001418135-23-000014_kdp-20230630.htm:31]**  | **2,270**  **[0001418135-23-000018_kdp-20230930.htm:35]**  | Growth of **6.8%**  **[0001418135-24-000006_ex991-keurigdrpepperreport.htm:14]**  | **2,093**  **[0001418135-24-000054_kdp-20240331.htm:22]**  | **2,407**  **[0001418135-24-000073_kdp-20240630.htm:24]**  | **2,390**  **[0001418135-24-000090_kdp-20240930.htm:26]**  | N/A |
| U.S. Coffee               | **931**  **[0001418135-23-000009_kdp-20230331.htm:15]**    | **970**  **[0001418135-23-000014_kdp-20230630.htm:31]**    | **1,012**  **[0001418135-23-000018_kdp-20230930.htm:35]**  | Decrease of **9.9%**  **[0001418135-24-000006_ex991-keurigdrpepperreport.htm:14]**  | **911**  **[0001418135-24-000054_kdp-20240331.htm:22]**    | **950**  **[0001418135-24-000073_kdp-20240630.htm:24]**    | **976**  **[0001418135-24-000090_kdp-20240930.htm:26]**    | N/A |
| International             | **415**  **[0001418135-23-000009_kdp-20230331.htm:15]**    | **489**  **[0001418135-23-000014_kdp-20230630.htm:31]**    | **523**  **[0001418135-23-000018_kdp-20230930.htm:35]**    | Increase of **11.5%**  **[0001418135-24-000006_ex991-keurigdrpepperreport.htm:14]**  | **464**  **[0001418135-24-000054_kdp-20240331.htm:22]**    | **565**  **[0001418135-24-000073_kdp-20240630.htm:24]**    | **525**  **[0001418135-24-000090_kdp-20240930.htm:26]**    | N/A |

a7152d1820a339b4f0ddad1c31f9b62922f98c2aa6124accf957945c1c08e394

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Keurig Dr Pepper Inc. (KDP) is a leading beverage company in North America that specializes in the manufacturing, marketing, distribution, and sale of a diverse range of hot and cold beverages and single-serve brewing systems. The company operates through three main segments: U.S. Refreshment Beverages, U.S. Coffee, and International, offering over 125 owned, licensed, and partner brands with significant consumer awareness and loyalty **[0001418135-24-000007_kdp-20231231.htm:103]** **[0001418135-24-000090_kdp-20240930.htm:23]** **[0001418135-24-000073_kdp-20240630.htm:21]** **[0001418135-24-000054_kdp-20240331.htm:19]**. KDP utilizes a flexible and scalable route-to-market network, including a direct-to-consumer e-commerce platform, to effectively distribute its products **[0001418135-24-000007_kdp-20231231.htm:5]**.

1. **U.S. Refreshment Beverages** - Manufactures, markets, and sells a variety of popular beverage brands, including Dr Pepper, Canada Dry, and Snapple, across the United States.
2. **U.S. Coffee** - Offers a range of coffee products, including K-Cup pods and Keurig brewers, catering to coffee enthusiasts in the United States.
3. **International** - Operates in Canada, Mexico, and the Caribbean, distributing a selection of beverages tailored to these markets.

8aa195b60cd1da2c2a1811db6ec6ecf06304bff7b42a191e79e1388ccecf4208

0cc8d3c4c435922cb0a76b3e68dcd97e347bb94873a8bbd741d2bc9e44e1226d

c106175afce61a776ee3e234f29cff0cc4988e60059f2b88377074ebb926747f

| Metric [USD Million] | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| **U.S. Refreshment Beverages** | N/A     | 2,007  **[0001418135-23-000009_kdp-20230331.htm:15]**  | 2,330  **[0001418135-23-000014_kdp-20230630.htm:31]**  | 2,270  **[0001418135-23-000018_kdp-20230930.htm:35]**  | N/A     | 2,093  **[0001418135-24-000054_kdp-20240331.htm:22]**  | 2,407  **[0001418135-24-000073_kdp-20240630.htm:24]**  | 2,390  **[0001418135-24-000090_kdp-20240930.htm:26]**  |
| **U.S. Coffee**                | N/A     | 931  **[0001418135-23-000009_kdp-20230331.htm:15]**   | 970  **[0001418135-23-000014_kdp-20230630.htm:31]**   | 1,012  **[0001418135-23-000018_kdp-20230930.htm:35]**  | N/A     | 911  **[0001418135-24-000054_kdp-20240331.htm:22]**   | 950  **[0001418135-24-000073_kdp-20240630.htm:24]**   | 976  **[0001418135-24-000090_kdp-20240930.htm:26]**   |
| **International**              | N/A     | 415  **[0001418135-23-000009_kdp-20230331.htm:15]**   | 489  **[0001418135-23-000014_kdp-20230630.htm:31]**   | 523  **[0001418135-23-000018_kdp-20230930.htm:35]**   | N/A     | 464  **[0001418135-24-000054_kdp-20240331.htm:22]**   | 565  **[0001418135-24-000073_kdp-20240630.htm:24]**   | 525  **[0001418135-24-000090_kdp-20240930.htm:26]**   |
| **Liquid Refreshment Beverages (LRB)** | N/A | 2,223  **[0001418135-23-000009_kdp-20230331.htm:15]**  | 2,627  **[0001418135-23-000014_kdp-20230630.htm:16]**  | 2,232  **[0001418135-23-000018_kdp-20230930.htm:19]**  | N/A | 2,365  **[0001418135-24-000054_kdp-20240331.htm:13]**  | 2,776  **[0001418135-24-000073_kdp-20240630.htm:14]**  | 2,711  **[0001418135-24-000090_kdp-20240930.htm:16]**  |
| **K-Cup Pods**                 | N/A     | 888  **[0001418135-23-000009_kdp-20230331.htm:15]**   | 869  **[0001418135-23-000014_kdp-20230630.htm:16]**   | 889  **[0001418135-23-000018_kdp-20230930.htm:19]**   | N/A     | 862  **[0001418135-24-000054_kdp-20240331.htm:13]**   | 863  **[0001418135-24-000073_kdp-20240630.htm:14]**   | 859  **[0001418135-24-000090_kdp-20240930.htm:16]**   |
| **Appliances**                 | N/A     | 137  **[0001418135-23-000009_kdp-20230331.htm:15]**   | 190  **[0001418135-23-000014_kdp-20230630.htm:16]**   | 231  **[0001418135-23-000018_kdp-20230930.htm:19]**   | N/A     | 141  **[0001418135-24-000054_kdp-20240331.htm:13]**   | 182  **[0001418135-24-000073_kdp-20240630.htm:14]**   | 222  **[0001418135-24-000090_kdp-20240930.htm:16]**   |
| **Other**                      | N/A     | 105  **[0001418135-23-000009_kdp-20230331.htm:15]**   | 103  **[0001418135-23-000014_kdp-20230630.htm:16]**   | 105  **[0001418135-23-000018_kdp-20230930.htm:19]**   | N/A     | 100  **[0001418135-24-000054_kdp-20240331.htm:13]**   | 101  **[0001418135-24-000073_kdp-20240630.htm:14]**   | 99  **[0001418135-24-000090_kdp-20240930.htm:16]**    |

7a5dcc82eabaacbfc8a7a6d6202cdc9f3dfb459236972ba6cff2f45912226b8a

1. Given the sluggish performance in the at-home coffee category and continued pricing pressure, how confident are you in returning the U.S. Coffee segment to growth in 2025, and what specific measures are you taking to offset rising green coffee costs?  **[KDP_3403620_11]** **[KDP_3403620_6]** 

2. With your recent acquisitions and partnerships in the energy drink category, including GHOST, C4, Black Rifle, and Bloom, is there a risk of overextending your infrastructure, and how do you plan to manage potential operational complexities and ensure successful integration?  **[KDP_3403620_10]** **[KDP_3403620_9]** **[KDP_3403620_13]** 

3. GHOST has been stuck at a 3% market share in its previous distribution network; what concrete steps will you take to significantly expand its market presence, and what key performance indicators will you track to measure success?  **[KDP_3403620_10]** **[KDP_3403620_1]** 

4. You mentioned the need for portfolio optimization, including potential pruning of less-performing brands; can you provide more details on which areas you are targeting and how this strategy might impact your short-term revenues?  **[KDP_3403620_12]** **[KDP_3403620_8]** **[KDP_3403620_2]** 

5. Given the current subdued operating environment and varied consumer health, how are you preparing for the uncertain elasticity impacts of your planned pricing actions, and what contingencies are in place if consumer response is more negative than anticipated?  **[KDP_3403620_8]** **[KDP_3403620_6]** 

a63a53608e94452442e111ced362af3668ebb009d04b8606f9cd5a9ec38d862a

U.S. Refreshment Beverages

U.S. Coffee

International

United States

- Canada

- Latin America and Other

Total Revenue

cf0580106a2a6d7605508dafdb278e5621dd3ba6b52c55882215e0baa137b33f

| Program Details          | Program 1          |
|--------------------------|--------------------|
| Approval Date            | October 1, 2021  **[0001418135-24-000090_kdp-20240930.htm:41]** |
| End Date/Duration        | January 1, 2022 - December 31, 2025  **[0001418135-24-000090_kdp-20240930.htm:41]** |
| Total additional amount  | **$4 billion**  **[0001418135-24-000090_kdp-20240930.htm:41]**  |
| Remaining authorization amount | **$1,810 million** (as of September 30, 2024)  **[0001418135-24-000090_kdp-20240930.htm:41]** |
| Details                  | Opportunistically return value to shareholders  **[0001418135-24-000073_kdp-20240630.htm:39]** |

d67a2358002bd30e94e5b6a2576bf43ebef79d8ba34407937f3503b145d7803e

- Coca-Cola: Competes in the beverage industry, offering competing brands in categories KDP participates in  **[0001418135-24-000007_kdp-20231231.htm:9]** .
- PepsiCo: Competes in the beverage industry, offering competing brands in categories KDP participates in  **[0001418135-24-000007_kdp-20231231.htm:9]** .
- Starbucks Corporation: Competes in the beverage industry, offering competing brands in categories KDP participates in  **[0001418135-24-000007_kdp-20231231.htm:9]** .
- The J.M. Smucker Company: Competes in the beverage industry, offering competing brands in categories KDP participates in  **[0001418135-24-000007_kdp-20231231.htm:9]** .
- The Kraft Heinz Company: Competes in the beverage industry, offering competing brands in categories KDP participates in  **[0001418135-24-000007_kdp-20231231.htm:9]** .
- Nestlé S.A.: Competes in the beverage industry, offering competing brands in categories KDP participates in  **[0001418135-24-000007_kdp-20231231.htm:9]** .

4101032182989fd3947127b0bd07107f6c5f12b2666d73d1e2b5aa42c5c26149

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: FY 2024
- **Guidance**:
  - **Net Sales Growth**: Mid-single-digit growth on a constant currency basis  **[KDP_3403620_7]** .
  - **EPS Growth**: High single-digit growth on a constant currency basis  **[KDP_3403620_7]** .
  - **Interest Expense**: $615 million to $625 million  **[KDP_3403620_7]** .
  - **Effective Tax Rate**: 22% to 23%  **[KDP_3403620_7]** .
  - **Diluted Weighted Average Shares Outstanding**: Approximately 1.37 billion  **[KDP_3403620_7]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: FY 2024
- **Guidance**:
  - **Net Sales Growth**: Mid-single-digit growth on a constant currency basis  **[KDP_3394284_9]** .
  - **EPS Growth**: High single-digit growth on a constant currency basis  **[KDP_3394284_9]** .
  - **Interest Expense**: $625 million to $645 million  **[KDP_3394284_9]** .
  - **Effective Tax Rate**: 22% to 23%  **[KDP_3394284_9]** .
  - **Diluted Weighted Average Shares Outstanding**: Approximately 1.37 billion  **[KDP_3394284_9]** .
  - **Free Cash Flow**: Expected improvement in the second half of the year  **[KDP_3394284_9]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: FY 2024
- **Guidance**:
  - **Net Sales Growth**: Mid-single-digit growth on a constant currency basis  **[KDP_3380750_8]** .
  - **EPS Growth**: High single-digit growth  **[KDP_3380750_8]** .
  - **Interest Expense**: $625 million to $645 million  **[KDP_3380750_8]** .
  - **Effective Tax Rate**: 22% to 23%  **[KDP_3380750_8]** .
  - **Diluted Weighted Average Shares Outstanding**: Approximately 1.37 billion  **[KDP_3380750_8]** .
  - **Free Cash Flow**: Expected acceleration with full-year conversion ahead of 2023 levels  **[KDP_3380750_8]** .
  - **Operating Margin Expansion**: Anticipated on a consolidated basis  **[KDP_3380750_8]** .
  - **Commodity Inflation**: Expected to be more moderate, with some inflation in green coffee prices  **[KDP_3380750_8]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: FY 2024
- **Guidance**:
  - **Net Sales Growth**: Mid-single-digit constant currency growth  **[KDP_3374551_9]** .
  - **EPS Growth**: High single-digit growth  **[KDP_3374551_9]** .
  - **Interest Expense**: $560 million to $580 million  **[KDP_3374551_10]** .
  - **Effective Tax Rate**: Approximately 22%  **[KDP_3374551_10]** .
  - **Diluted Weighted Average Shares Outstanding**: Approximately 1.4 billion  **[KDP_3374551_10]** .
  - **Currency Impact**: 50 basis points headwind on top and bottom line  **[KDP_3374551_9]** .

22a9847b89b274cfd1ad27fdfd7a2208de3a2228c0133542da63c6a6d3b473e0

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| Name                   | Position                                      | Start Date         | Short Bio                                                                                                                                                                                                                                                                                                                                                       |
|------------------------|-----------------------------------------------|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Andrew Archambault     | President, U.S. Refreshment Beverages         | November 6, 2023   | Andrew Archambault leads all aspects of the U.S. Refreshment Beverages business unit, including marketing, fountain food service, concentrate sales, and the nationwide direct store delivery network. He previously served as President, Commercial & Beverage Concentrates and held roles at The Nature’s Bounty Co., Bacardi USA, and The Coca-Cola Company  **[0001193125-24-118204_d469486ddef14a.htm:26]** **[0001418135-24-000007_kdp-ex1020_20231231.htm:0]** **[0001193125-24-118204_d469486ddef14a.htm:6]** . |
| Timothy Cofer          | Chief Executive Officer                       | April 26, 2024     | Timothy "Tim" Cofer became CEO of KDP in April 2024. He was previously the COO of KDP and CEO of Central Garden & Pet Company. He has over 30 years of experience in the consumer packaged goods industry, with significant roles at Mondelēz International and Kraft Foods  **[0001193125-24-118204_d469486ddef14a.htm:11]** **[0001193125-24-118204_d469486ddef14a.htm:31]** **[0001193125-24-118204_d469486ddef14a.htm:6]** .                                                                                 |
| Mary Beth DeNooyer     | Chief Human Resources Officer                 | July 2019          | Mary Beth DeNooyer leads all Human Resources responsibilities at KDP. She has nearly 30 years of experience in food and beverage companies, previously serving as Chief HR Officer at Pinnacle Foods and Hillshire Brands, and holding key HR roles at Sara Lee and Pepsi Bottling Group  **[0001193125-24-118204_d469486ddef14a.htm:26]** **[0001193125-23-127023_d410624ddef14a.htm:21]** .                                                                     |
| Robert Gamgort         | Executive Chairman                            | April 26, 2024     | Robert "Bob" Gamgort transitioned to Executive Chairman in April 2024 after serving as CEO. He has been with KDP since its formation in July 2018 and has over 35 years of experience in the consumer products industry, including leadership roles at Pinnacle Foods and Mars, Inc.  **[0001193125-24-118204_d469486ddef14a.htm:12]** **[0001193125-24-118204_d469486ddef14a.htm:31]** **[0001193125-24-118204_d469486ddef14a.htm:18]** .                                                                       |
| Roger Johnson          | Chief Supply Chain Officer                    | October 2022       | Roger Johnson oversees KDP's end-to-end supply chain. He joined KDP in 2016 and has held several leadership positions, including Chief Product Officer for the Keurig brand. He has over 20 years of experience in consumer durables, electronics, food and beverage, and automotive industries  **[0001193125-24-118204_d469486ddef14a.htm:27]** **[0001193125-23-127023_d410624ddef14a.htm:21]** .                                                              |
| Patrick Minogue        | President, U.S. Coffee                        | November 2023      | Patrick Minogue is responsible for driving KDP's leadership in the single-serve coffee category. He has been with KDP since 2015, previously serving as Senior Vice President and GM of Coffee Operations. He has a background in technology and marketing, with experience at Bacardi USA and Molson Coors Beverage Company  **[0001193125-24-118204_d469486ddef14a.htm:27]** .                                      |
| Monique Oxender        | Chief Corporate Affairs Officer               | November 2023      | Monique Oxender was previously the Interim Chief Corporate Affairs Officer and Senior Vice President & Chief Sustainability Officer at KDP. She has also held management roles at Ford Motor Company, focusing on supply chain sustainability programs  **[0001193125-24-118204_d469486ddef14a.htm:27]** .                                                                                                        |
| Sudhanshu Priyadarshi  | Chief Financial Officer and President, International | November 2022 (CFO), November 2023 (President, International) | Sudhanshu Priyadarshi joined KDP as CFO in November 2022, with his role expanding to include President, International in November 2023. He previously served as CFO of Vista Outdoor Inc. and held leadership roles at Flexport, Walmart, Cipla, and PepsiCo  **[0001193125-24-118204_d469486ddef14a.htm:29]** **[0001193125-23-127023_d410624ddef14a.htm:22]** .                                                        |
| Karin Rotem-Wildeman   | Chief Research & Development Officer          | January 2023       | Karin Rotem-Wildeman leads product development, packaging innovation, and flavor technology at KDP. She was previously the Chief Scientific Officer at the LIVEKINDLY Collective and Global Head of R&D at Godiva Chocolatier. She spent 18 years at PepsiCo in global R&D leadership roles  **[0001193125-24-118204_d469486ddef14a.htm:29]** **[0001193125-23-127023_d410624ddef14a.htm:22]** .                                                               |
| Anthony Shoemaker      | Chief Legal Officer, General Counsel and Secretary | October 2021       | Anthony Shoemaker oversees legal affairs at KDP. He was previously Senior Vice President and Assistant General Counsel at KDP and held various positions at Tenet Healthcare. He began his legal career at Gibson, Dunn & Crutcher LLP  **[0001193125-24-118204_d469486ddef14a.htm:29]** **[0001193125-23-127023_d410624ddef14a.htm:22]** .                                                                               |
| Justin Whitmore        | Chief Strategy Officer                        | March 2021         | Justin Whitmore is responsible for enterprise strategy, mergers and acquisitions, strategic partnerships, and venture investments at KDP. He previously held roles at Tyson Foods, including Executive Vice President and Chief Strategy & Sustainability Officer, and worked as a management consultant at McKinsey & Company  **[0001193125-24-118204_d469486ddef14a.htm:30]** .                                   |

7d610e823a19ffa7cfa2fda4fd20d19d434519cf4c0c905de9f6213303613934

**Annual guidance for FY 2024:**
- **Net Sales Growth**: Mid-single-digit growth on a constant currency basis  **[KDP_3403620_7]** (no change from Mid-single-digit growth on a constant currency basis  **[KDP_3394284_9]** )  
- **EPS Growth**: High-single-digit growth on a constant currency basis  **[KDP_3403620_7]** (no change from High-single-digit growth on a constant currency basis  **[KDP_3394284_9]** )  
- **Interest Expense**: $615 million to $625 million  **[KDP_3403620_7]** (lowered from $625 million to $645 million  **[KDP_3394284_9]** )  
- **Effective Tax Rate**: 22% to 23%  **[KDP_3403620_7]** (no change from prior guidance  **[KDP_3394284_9]** )  
- **Diluted Weighted Average Shares Outstanding**: Approximately 1.37 billion  **[KDP_3403620_7]** (no change from prior guidance  **[KDP_3394284_9]** )  

5e58807b2f80b3b56eded838c85110cd92d4caab143cbbbe54ce8c4f48784008

Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from / Repayments of Debt [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

af175832867c51d608c6d66087379f2c9632da986cbdb7d09a99f9b1d765c96b

| Name                  | Start Date | End Date | Reason for Change |
|-----------------------|------------|----------|-------------------|
| Deloitte & Touche LLP | 2016  **[0001418135-24-000007_kdp-20231231.htm:71]**  | Present  | Current auditor   |

e04067c496a4d0c3e38db87bc8193070b5ead06480110f28bed837ecb58e7094

Sales Volume for U.S. Refreshment Beverages (percentage)

K-Cup Pod Volume in U.S. Coffee (percentage)

Appliance Volume in U.S. Coffee (percentage)

LRB Sales Volume in International Segment (percentage)

K-Cup Pods Sales Volume in International Segment (percentage)

Appliances Sales Volume in International Segment (percentage)

Volume/Mix Growth for U.S. Refreshment Beverages (percentage)

Volume/Mix Growth for U.S. Coffee (percentage)

Volume/Mix Growth for International (percentage)

Volume/Mix Growth for Entire KDP (percentage)

Net Price Realization for U.S. Refreshment Beverages (percentage)

Net Price Realization for U.S. Coffee (percentage)

Net Price Realization for International (percentage)

Net Price Realization for Entire KDP (percentage)

Days Inventory Outstanding (days)

Days Sales Outstanding (days)

Days Payables Outstanding (days)

Cash Conversion Cycle (days)

4985c1ad905f55ef5b974d61b8692d586b75f25c28322edb05a8f202d0eebca1

8822fd65f72809080c5e1ff4c8d16f65b0615aad123e25471f39c966c4ca1ec7

- Total Revenue: $3,891 (+2% YoY)  **[0001418135-23-000018_kdp-20230930.htm:35]** **[0001418135-24-000090_kdp-20240930.htm:26]**   
- U.S. Refreshment Beverages: $2,390 (+5% YoY)  **[0001418135-23-000018_kdp-20230930.htm:35]** **[0001418135-24-000090_kdp-20240930.htm:26]**   
- Net Income: $616 (**+19%** YoY)  **[0001418135-23-000018_kdp-20230930.htm:3]** **[0001418135-24-000090_kdp-20240930.htm:27]**   
- Diluted EPS: $0.46 (**+28%** YoY)  **[0001418135-23-000018_kdp-20230930.htm:3]** **[0001418135-24-000090_kdp-20240930.htm:27]**   
- Capital Expenditures: $125 (**>1,900%** YoY)  **[0001418135-23-000018_kdp-20230930.htm:5]** **[0001418135-24-000090_kdp-20240930.htm:4]**   

4e143cf3136c68c1563a8cb9b15f3cd0b58c863b10073314325d4878a0a0e263

4d87aa04a60a9d7f282b2c582092e39762967e5834b863e504abd91a13f01b46

1. **Coffee Margin Outlook**  
   **Q:** Can you discuss coffee profit margins if top line remains muted?  
   **A:** Management explained they rebuilt coffee margins from **30%** in H1 to **36%** in Q4.  **[KDP_3374551_13]**  They expect margin expansion in 2024 through structural actions like renegotiating partner contracts and progress on Spartanburg.  **[KDP_3374551_13]**  However, they cautioned not to rely on second-half margins as ongoing and emphasized balancing margin expansion with supporting top line recovery.  **[KDP_3374551_13]** 

2. **Single-Serve Coffee Recovery**  
   **Q:** Has anything structurally changed in single-serve coffee affecting growth?  
   **A:** Management spent considerable time studying the coffee segment since COVID.  **[KDP_3374551_15]**  They concluded there is **no structural change**; the slower recovery is due to many small factors.  **[KDP_3374551_15]**  Consumer equity and beliefs around coffee remain strong, even among younger generations.  **[KDP_3374551_15]**  They continue to drive growth through innovation and marketing, focusing on both premium and value offerings to address a bifurcation in consumer income levels.  **[KDP_3374551_15]** 

3. **U.S. Coffee Business Outlook**  
   **Q:** What are expectations for U.S. coffee business in 2024?  
   **A:** Management expects mid-single-digit net sales growth, with **muted contribution** from U.S. coffee.  **[KDP_3374551_12]**  They anticipate **sequential improvement** throughout the year.  **[KDP_3374551_12]**  Growth drivers include new programming, partnerships with La Colombe and Luvata, marketing campaigns on Green Mountain and Original Donut Shop, and innovation in refresher and ICE platforms.  **[KDP_3374551_12]** 

4. **Refreshment Beverages Growth**  
   **Q:** What are assumptions for U.S. refreshment beverages growth?  
   **A:** Management expects the category to revert to **long-term patterns** with balanced price and volume mix.  **[KDP_3374551_17]**  Partnerships are important, contributing about **200 basis points** to growth in 2024.  **[KDP_3374551_17]**  Growth will be slightly more **second-half focused** due to timing of Dr Pepper innovation and ramp-up of Electrolit, which is becoming fully integrated into their system.  **[KDP_3374551_17]** 

5. **Coffee Pods Price Mix**  
   **Q:** Can you comment on coffee pods price mix and shift to partner brands?  
   **A:** Management noted that mix was affected by selling more entry-level brewers and a lower percentage of owned and licensed pods.  **[KDP_3374551_16]**  The category became more promotional, and they addressed price gaps in their owned and licensed portfolio.  **[KDP_3374551_16]**  They expect their promotional and marketing activities and innovation in owned and licensed pods to bear fruit in 2024.  **[KDP_3374551_16]** 

7ba064b48af9e137003594c85543649c78e30a93edd7fb28fca8cf91e7d871cb

| Year | Amount Due (in millions) | Debt Type | Interest Rate (%) | % of Total Debt |
|------|--------------------------|-----------|-------------------|-----------------|
| 2024 | 1,150 **[0001418135-24-000090_kdp-20240930.htm:8]** | 2024 Notes | 0.750 **[0001418135-24-000090_kdp-20240930.htm:8]** | 7.7% = (1,150 / 14,885) * 100 **[0001418135-24-000090_kdp-20240930.htm:7]** **[0001418135-24-000090_kdp-20240930.htm:8]** |
| 2024 | 1,943 **[0001418135-24-000090_kdp-20240930.htm:7]** | Commercial Paper Notes | 5.50 **[0001418135-24-000090_kdp-20240930.htm:8]** | 13.1% = (1,943 / 14,885) * 100 **[0001418135-24-000090_kdp-20240930.htm:7]** **[0001418135-24-000090_kdp-20240930.htm:8]** |
| 2025 | 529 **[0001418135-24-000090_kdp-20240930.htm:8]** | 2025 Merger Notes | 4.417 **[0001418135-24-000090_kdp-20240930.htm:8]** | 3.6% = (529 / 14,885) * 100 **[0001418135-24-000090_kdp-20240930.htm:7]** **[0001418135-24-000090_kdp-20240930.htm:8]** |
| 2025 | 500 **[0001418135-24-000090_kdp-20240930.htm:8]** | 2025 Notes | 3.400 **[0001418135-24-000090_kdp-20240930.htm:8]** | 3.4% = (500 / 14,885) * 100 **[0001418135-24-000090_kdp-20240930.htm:7]** **[0001418135-24-000090_kdp-20240930.htm:8]** |
| 2026 | 400 **[0001418135-24-000090_kdp-20240930.htm:8]** | 2026 Notes | 2.550 **[0001418135-24-000090_kdp-20240930.htm:8]** | 2.7% = (400 / 14,885) * 100 **[0001418135-24-000090_kdp-20240930.htm:7]** **[0001418135-24-000090_kdp-20240930.htm:8]** |
| 2027 | 350 **[0001418135-24-000090_kdp-20240930.htm:8]** | 2027-B Notes | Floating (Compounded SOFR + 0.88) **[0001418135-24-000090_kdp-20240930.htm:8]** | 2.4% = (350 / 14,885) * 100 **[0001418135-24-000090_kdp-20240930.htm:7]** **[0001418135-24-000090_kdp-20240930.htm:8]** |
| 2027 | 750 **[0001418135-24-000090_kdp-20240930.htm:8]** | 2027-C Notes | 5.100 **[0001418135-24-000090_kdp-20240930.htm:8]** | 5.0% = (750 / 14,885) * 100 **[0001418135-24-000090_kdp-20240930.htm:7]** **[0001418135-24-000090_kdp-20240930.htm:8]** |
| 2027 | 500 **[0001418135-24-000090_kdp-20240930.htm:8]** | 2027 Notes | 3.430 **[0001418135-24-000090_kdp-20240930.htm:8]** | 3.4% = (500 / 14,885) * 100 **[0001418135-24-000090_kdp-20240930.htm:7]** **[0001418135-24-000090_kdp-20240930.htm:8]** |
| 2028 | 1,112 **[0001418135-24-000090_kdp-20240930.htm:8]** | 2028 Merger Notes | 4.597 **[0001418135-24-000090_kdp-20240930.htm:8]** | 7.5% = (1,112 / 14,885) * 100 **[0001418135-24-000090_kdp-20240930.htm:7]** **[0001418135-24-000090_kdp-20240930.htm:8]** |
| 2029 | 750 **[0001418135-24-000090_kdp-20240930.htm:8]** | 2029-B Notes | 5.050 **[0001418135-24-000090_kdp-20240930.htm:8]** | 5.0% = (750 / 14,885) * 100 **[0001418135-24-000090_kdp-20240930.htm:7]** **[0001418135-24-000090_kdp-20240930.htm:8]** |
| 2029 | 1,000 **[0001418135-24-000090_kdp-20240930.htm:8]** | 2029 Notes | 3.950 **[0001418135-24-000090_kdp-20240930.htm:8]** | 6.7% = (1,000 / 14,885) * 100 **[0001418135-24-000090_kdp-20240930.htm:7]** **[0001418135-24-000090_kdp-20240930.htm:8]** |
| 2030 | 750 **[0001418135-24-000090_kdp-20240930.htm:8]** | 2030 Notes | 3.200 **[0001418135-24-000090_kdp-20240930.htm:8]** | 5.0% = (750 / 14,885) * 100 **[0001418135-24-000090_kdp-20240930.htm:7]** **[0001418135-24-000090_kdp-20240930.htm:8]** |
| 2031 | 500 **[0001418135-24-000090_kdp-20240930.htm:8]** | 2031 Notes | 2.250 **[0001418135-24-000090_kdp-20240930.htm:8]** | 3.4% = (500 / 14,885) * 100 **[0001418135-24-000090_kdp-20240930.htm:7]** **[0001418135-24-000090_kdp-20240930.htm:8]** |
| 2031 | 500 **[0001418135-24-000090_kdp-20240930.htm:8]** | 2031-B Notes | 5.200 **[0001418135-24-000090_kdp-20240930.htm:8]** | 3.4% = (500 / 14,885) * 100 **[0001418135-24-000090_kdp-20240930.htm:7]** **[0001418135-24-000090_kdp-20240930.htm:8]** |
| 2032 | 850 **[0001418135-24-000090_kdp-20240930.htm:8]** | 2032 Notes | 4.050 **[0001418135-24-000090_kdp-20240930.htm:8]** | 5.7% = (850 / 14,885) * 100 **[0001418135-24-000090_kdp-20240930.htm:7]** **[0001418135-24-000090_kdp-20240930.htm:8]** |
| 2034 | 650 **[0001418135-24-000090_kdp-20240930.htm:8]** | 2034 Notes | 5.300 **[0001418135-24-000090_kdp-20240930.htm:8]** | 4.4% = (650 / 14,885) * 100 **[0001418135-24-000090_kdp-20240930.htm:7]** **[0001418135-24-000090_kdp-20240930.htm:8]** |
| 2038 | 211 **[0001418135-24-000090_kdp-20240930.htm:8]** | 2038 Merger Notes | 4.985 **[0001418135-24-000090_kdp-20240930.htm:8]** | 1.4% = (211 / 14,885) * 100 **[0001418135-24-000090_kdp-20240930.htm:7]** **[0001418135-24-000090_kdp-20240930.htm:8]** |
| 2045 | 550 **[0001418135-24-000090_kdp-20240930.htm:8]** | 2045 Notes | 4.500 **[0001418135-24-000090_kdp-20240930.htm:8]** | 3.7% = (550 / 14,885) * 100 **[0001418135-24-000090_kdp-20240930.htm:7]** **[0001418135-24-000090_kdp-20240930.htm:8]** |
| 2046 | 400 **[0001418135-24-000090_kdp-20240930.htm:8]** | 2046 Notes | 4.420 **[0001418135-24-000090_kdp-20240930.htm:8]** | 2.7% = (400 / 14,885) * 100 **[0001418135-24-000090_kdp-20240930.htm:7]** **[0001418135-24-000090_kdp-20240930.htm:8]** |
| 2048 | 391 **[0001418135-24-000090_kdp-20240930.htm:8]** | 2048 Merger Notes | 5.085 **[0001418135-24-000090_kdp-20240930.htm:8]** | 2.6% = (391 / 14,885) * 100 **[0001418135-24-000090_kdp-20240930.htm:7]** **[0001418135-24-000090_kdp-20240930.htm:8]** |
| 2050 | 750 **[0001418135-24-000090_kdp-20240930.htm:8]** | 2050 Notes | 3.800 **[0001418135-24-000090_kdp-20240930.htm:8]** | 5.0% = (750 / 14,885) * 100 **[0001418135-24-000090_kdp-20240930.htm:7]** **[0001418135-24-000090_kdp-20240930.htm:8]** |
| 2051 | 500 **[0001418135-24-000090_kdp-20240930.htm:8]** | 2051 Notes | 3.350 **[0001418135-24-000090_kdp-20240930.htm:8]** | 3.4% = (500 / 14,885) * 100 **[0001418135-24-000090_kdp-20240930.htm:7]** **[0001418135-24-000090_kdp-20240930.htm:8]** |
| 2052 | 1,150 **[0001418135-24-000090_kdp-20240930.htm:8]** | 2052 Notes | 4.500 **[0001418135-24-000090_kdp-20240930.htm:8]** | 7.7% = (1,150 / 14,885) * 100 **[0001418135-24-000090_kdp-20240930.htm:7]** **[0001418135-24-000090_kdp-20240930.htm:8]** |

761130a7fe5e659f6e318e742a2c395ef0bbf12fe43fb87a5a9e7a833b7dd2d4

41a168b99fe152fedeeee8842d8dc798a2d1cbe02e4a52a6228ef1e8831d51de

- **KDP's international segment grew double digits**, with **constant currency net sales growth of 14.7%** in Q2, driven by category expansion and market share gains in **Mexico and Canada**, particularly in **low and no-alcohol beverages** and **Peñafiel line extensions**; the company expects this strong performance and growth potential to continue.  **[KDP_3394284_17]**
- **Core brands like Dr Pepper are performing strongly**, with **market share gains** and contributing to **overall on-plan performance**, even in a mixed consumer environment; **carbonated soft drinks are highly resilient**, and KDP's brands are **outperforming expectations**.  **[KDP_3394284_11]**
- **KDP's C4 energy drink brand grew approximately 30% in retail sales** in the quarter, and with only **3% market share**, it has significant potential for further growth in the **highly attractive energy drinks market**, which remains the **fastest-growing major beverage category** on a year-to-date basis.  **[KDP_3394284_15]**

dad26b524d51f5e632e54587e72ac3e0073f947429b5aa168baccdb836c4e6e3

- **KDP is facing cost inflation pressures, particularly in green coffee and aluminum, which could impact margins and profitability in the coffee segment.**  **[KDP_3380750_11]**
- **Growth in the energy drink category has moderated**, potentially affecting KDP's partnership with C4 Energy and limiting future growth in this segment.  **[KDP_3380750_14]**
- **Uncertainty surrounds the launch and scaling of new innovations like the Alta brewer system**, with financial impacts expected later in the year, possibly leading to weaker near-term performance.  **[KDP_3380750_15]** ,  **[KDP_3380750_18]** ,  **[KDP_3380750_16]**

0415dc056431ca2d4ebd80544b3b6c1e1f4db518af0a29a0c0bb90bf9c9ca0af

- **Analysts express concerns that KDP may be overextending itself by taking on too many initiatives simultaneously, which could strain its infrastructure and execution capabilities.** They point out the addition of brands like GHOST and Electrolit and question whether the system can handle the increased complexity  **[KDP_3403620_13]** .
- **Underperformance in the U.S. coffee segment is impacting revenue and profitability, with no immediate signs of improvement.** The company admits to a soft quarter, challenges in pricing realization due to persistent promotions, and that at-home coffee category consumption remains muted  **[KDP_3403620_4]** .
- **The operating environment remains subdued with stretched consumers and uncertainty around inflationary pressures, posing risks to future performance.** The company acknowledges that there are no immediate signs of relief for consumers, and elasticity impacts from necessary pricing actions are uncertain  **[KDP_3403620_8]** .

175c9ccfe474d0dbd6518615278910772a58c691ae87ed035ff191ee362fd1e0

- **KDP's acquisition of a majority stake in GHOST, a fast-growing energy drink brand, strengthens its position in the high-growth energy drink category and leverages its proven distribution capabilities to drive significant growth, similar to its success with C4.**  **[KDP_3403620_10]**
- **KDP's robust Direct Store Delivery (DSD) network and infrastructure are well-prepared to integrate new brands like GHOST and Bloom, supporting future growth and handling increased complexity from multiple initiatives.**  **[KDP_3403620_13]**
- **KDP's strategic focus on portfolio optimization by adding high-growth assets like GHOST and pruning less profitable brands positions the company for stronger top-line growth and margin expansion in the long term.**  **[KDP_3403620_12]**

b94e2abf3fd361a145ba6744587d9fd3f4e1bc956a6587754d5eb96bb87231d7

- **The recovery in the at-home coffee segment has been slower than expected, with management expressing dissatisfaction and noting they are "not happy with the pace of the rebound," introducing uncertainty to future performance.**  **[KDP_3374551_13]** **[KDP_3374551_12]**
- **Shift towards lower-priced brewers and unlicensed pods, along with increased promotional activity due to soft category consumption, could pressure margins and impact revenue growth.**  **[KDP_3374551_16]**
- **Growth in U.S. refreshment beverages is expected to slow down, reverting to longer-term patterns with more balance between price and volume mix, and is heavily reliant on partnerships contributing approximately 200 basis points, indicating potential risks if these partnerships underperform.**  **[KDP_3374551_17]** **[KDP_3374551_12]**

6a99b7cb4c01b54a8df100da0acff4083fd96a1396ea3830c52d9298584c9b49

1. **Coffee Segment Outlook**  
   **Q:** Are you planning for coffee headwinds, and can you expand margins?  
   **A:** Management remains bullish on coffee's long-term prospects but acknowledges that at-home coffee performance is **sluggish** and recovery is taking longer than anticipated. They are focusing on controllable factors, noting their single-serve category and brands are **outperforming**. They are planning prudently, have announced pricing to offset **green coffee cost increases** going into effect in early **2025**, expecting some elasticity impact but anticipating a **healthier top-line trend** and continued good market share. Margins expanded in the first half but started to **come under pressure in Q3**, expected to continue in Q4 due to green coffee costs. In 2025, they expect coffee inflation to continue, will offset with pricing and focus on productivity, aiming to manage for **operating profit growth**, with opportunities to **rebuild segment margin over a multiyear basis**.  **[KDP_3403620_11]** 

2. **GHOST Acquisition Benefits**  
   **Q:** How will KDP enhance GHOST's growth and impact C-store scale?  
   **A:** Management believes they can replicate their success with **C4** to significantly boost GHOST's growth. In less than **2 years**, they've **doubled the business** with C4, increased market share by over **1 point**, and **doubled total distribution points** in C-stores and UDS. They bring R&D capabilities, innovation, marketing strength, and commercial teams to the partnership. The addition of GHOST could add close to **20% additional scale** in small format to KDP's footprint, driving their DSD system's flywheel and economics.  **[KDP_3403620_10]** 

3. **Portfolio Optimization Strategy**  
   **Q:** How are you balancing adding growth assets and pruning your portfolio?  
   **A:** Management is actively assessing their portfolio to determine which categories and brands to emphasize and which to prune. Adding a high-growth asset like GHOST gives them top-line flexibility going into **'25** to make tough choices on portfolio optimization. While this may come with net sales trade-offs, the long-term benefit is a faster-growing portfolio with higher service levels and a more attractive cost structure, driving efficiency across the supply chain.  **[KDP_3403620_12]** 

4. **Operational Capacity and GHOST Transition**  
   **Q:** Can your system handle the added complexity, including GHOST's transition?  
   **A:** Management feels well-prepared to take on GHOST, citing their success with C4 and a smooth transition with Electrolit. They've invested in infrastructure—branches, DCs, warehouses—and have been acquiring territories, demonstrating confidence in their DSD system. They expect to begin transitioning GHOST's distribution from Anheuser-Busch in **mid-2025** after a **6-month termination notice**, then assume full distribution to ensure GHOST is available everywhere.  **[KDP_3403620_13]** 

5. **Energy Portfolio Approach**  
   **Q:** Are there concerns about blurring lines in your energy portfolio?  
   **A:** Management believes the energy category's maturity allows for a portfolio of brands serving distinct consumer needs and occasions. They now have **4 to 5 material brands**—C4, GHOST, Black Rifle, and Bloom—that complement each other. Each brand targets different demographics and occasions, from performance-based C4 to lifestyle-focused GHOST, mainstream Black Rifle, and female-oriented Bloom. This multifaceted approach aims to generate scale benefiting their DSD system.  **[KDP_3403620_9]** 

66890e2b668bfd4ae3ffd0687bd54a0497febae034cb39ae0c3a415096e1396c

- **Sequential improvement in market share** is expected due to innovation launches in **CSDs** and the **Bai** relaunch, with the **full financial impact skewed to the second half** of the year.  **[KDP_3380750_15]**
- KDP is effectively managing inflation, expecting **mid-single-digit top-line and high single-digit EPS growth**, even with pressures in **green coffee and aluminum** costs. The **coffee segment** is strengthening with **owned and licensed distribution points up at a double-digit rate**, increased display activity, and innovation fueling improved performance expected to continue through the year.  **[KDP_3380750_11]** ,  **[KDP_3380750_18]**
- Strong growth in partnerships like **C4 Energy**, with **Total Distribution Points up close to 60% and sales up 65%**, and continued growth potential through exciting innovation. The **Alta brewer system** is anticipated to drive growth in the single-serve coffee category, with partners actively involved in its rollout.  **[KDP_3380750_14]** ,  **[KDP_3380750_16]**

e3563b76553cac1589a460f49cc9100f88dd7c928768028237fcd5e6e212f923

1. **Organic Sales Guidance**  
   **Q:** Can you discuss the drivers of H2 organic sales acceleration?  
   **A:** The company anticipates sequentially stronger top-line growth in the back half, primarily due to factors within its control.  **[KDP_3394284_12]**  The main driver is the scaling of partnerships with brands like **Electrolit**, **Black Rifle**, and **La Colombe**, which will significantly contribute in **Q3 and Q4**.  **[KDP_3394284_12]**  Additionally, innovation in the base business, such as **Creamy Coconut**, **Canada Dry Fruit Splash**, and the **Bai WonderWater** restage, will support growth.  **[KDP_3394284_12]**  Improved international performance will also be a meaningful contributor.  **[KDP_3394284_12]**  The current environment can hold, and no significant improvement in core trends is needed to hit the target.  **[KDP_3394284_12]** 

2. **Green Coffee Prices**  
   **Q:** How will rising green coffee prices impact your pricing strategy?  
   **A:** Rising **green coffee prices** are creating a headwind in H2, but this has been factored into the guidance.  **[KDP_3394284_13]**  The company hedges for **6 to 9 months**, so the impact is included.  **[KDP_3394284_13]**  While promotional dynamics currently conflict with higher costs, the company intends to responsibly manage price gaps and protect its ability to fund high-quality investments.  **[KDP_3394284_13]** 

3. **Coffee Pricing Strategy**  
   **Q:** Where do you stand on coffee price gaps and promotions?  
   **A:** The company feels good about current price gaps after steps taken to position versus competition.  **[KDP_3394284_14]**  The affordability strategy includes **down counts** from 12 to 10 in food channels and from 100 to 80 in club channels, helping to hit key price points.  **[KDP_3394284_14]**  Value messaging and entry-price brewers are also part of the strategy.  **[KDP_3394284_14]**  The initiatives are largely rolled out, with down counts in production and rolling through the marketplace.  **[KDP_3394284_14]** 

4. **Energy Drinks and Coffee**  
   **Q:** What's driving the slowdown in energy drinks and coffee?  
   **A:** The company observes that **energy drink volumes have moderated**, likely due to macroeconomic pressures on low and middle-income consumers.  **[KDP_3394284_15]**  Energy drinks skew towards convenience stores and single-serve purchases, which are under pressure.  **[KDP_3394284_15]**  Despite this, energy remains attractive long-term, with significant household penetration potential.  **[KDP_3394284_15]**  The company is excited about its position with **C4**, which grew about **30%** in retail sales during the quarter.  **[KDP_3394284_15]**  In coffee, at-home volumes remain muted but the company is encouraged by **sequential improvement in K-Cup volume trends**.  **[KDP_3394284_15]** 

5. **Operating Conditions and Pricing**  
   **Q:** Are categories weaker than expected, and can consumers absorb more price increases?  
   **A:** Despite an **uneven** consumer environment, the company is pleased with Q2 execution and results.  **[KDP_3394284_11]**  There is a bifurcation across income levels; high-income consumers remain resilient, while low and middle-income consumers are under pressure and seeking value.  **[KDP_3394284_11]**  **CSDs (carbonated soft drinks) are highly resilient**, outperforming expectations with robust volume and value growth, led by **Dr Pepper** gaining share in Q2.  **[KDP_3394284_11]**  Challenges exist in still beverages and channels like convenience stores.  **[KDP_3394284_11]**  The broad portfolio allows the company to navigate both opportunities and challenges.  **[KDP_3394284_11]** 

6. **International Business Growth**  
   **Q:** What are the key drivers for international growth, and how will you enter new markets?  
   **A:** International growth reflects growing categories and share gains, with expansion in **low and no alcohol** in Canada and Mexico, and **Peñafiel** line extensions in Mexico.  **[KDP_3394284_17]**  Investment in route to market and coolers in Mexico are driving execution.  **[KDP_3394284_17]**  The company focuses on both organic and inorganic strategies, using a **buy, build, and partner model** to unlock potential.  **[KDP_3394284_17]**  While the main focus is on driving growth in existing markets, there is interest in inorganic entry into new markets.  **[KDP_3394284_17]** 

7. **Coffee Pod Volumes and Pricing**  
   **Q:** Will coffee pod volume improvements continue, and what about pricing?  
   **A:** The company is encouraged by **four consecutive quarters of sequential improvement in K-Cup volume**, with shipments stabilizing in Q2.  **[KDP_3394284_16]** **[KDP_3394284_18]**  It expects H2 pod shipment trends to improve further, particularly in **Q4**, supported by owned and licensed business progress and innovation.  **[KDP_3394284_16]** **[KDP_3394284_18]**  Regarding pricing, the company plans to responsibly manage price gaps while protecting margins amid rising green coffee costs.  **[KDP_3394284_18]**  Promotional activity will be closely monitored, aiming for sustainable growth in the single-serve category.  **[KDP_3394284_18]** 

156b79a68ce3c8b130ae01548313b22af6d03f9881641607b30e8478e98fe543

1. **Inflation Impact on Margins**  
   **Q:** How will inflation in coffee and aluminum affect margins?  
   **A:** We expect **some inflation in 2024**, but at a **more moderate level** than in recent years.  **[KDP_3380750_11]**  We've factored in inflation in **green coffee and aluminum** into our guidance, which remains at **mid-single-digit top line** and **high single-digit EPS growth**.  **[KDP_3380750_11]** 

2. **Coffee Pricing Strategy**  
   **Q:** How are you managing coffee margins amid cost inflation and discounts?  
   **A:** Our focus is on **growing the entire coffee ecosystem** rather than maximizing any single brand's share.  **[KDP_3380750_11]**  We adjusted pricing to protect our **owned and licensed brands** when competitive movements affected our positioning.  **[KDP_3380750_11]**  Despite some promotional adjustments, we saw **double-digit growth in distribution points** and expect continued strength through innovation and marketing.  **[KDP_3380750_11]** 

3. **Marketing Approach in Coffee**  
   **Q:** How are you enhancing coffee marketing to reach consumers effectively?  
   **A:** We're increasing our **total marketing investment in coffee**.  **[KDP_3380750_12]**  A **barbell strategy** is employed to reinforce value in our pod business and drive premium offerings.  **[KDP_3380750_12]**  New marketing in **Q2** will focus on a **value message** targeting consumers shifting from away-from-home to at-home coffee.  **[KDP_3380750_12]**  We're also launching the **Brew + Chill brewer** in the fall and amplifying marketing for premium partnerships and ready-to-drink options.  **[KDP_3380750_12]** 

4. **Black Rifle Partnership**  
   **Q:** Does adding Black Rifle Coffee boost confidence in coffee volume growth?  
   **A:** Welcoming **Black Rifle into the Keurig ecosystem** reinforces our value proposition as the **single-serve category leader**.  **[KDP_3380750_13]**  This partnership, among others, enhances consumer choice and supports **sequential improvement in coffee volumes** into the back half of the year and **2025**.  **[KDP_3380750_13]** 

5. **Cold Beverage Innovation Timing**  
   **Q:** Will cold beverage trends improve as innovation launches, like Creamy Coconut?  
   **A:** We're experiencing **later phasing of major innovations** compared to last year.  **[KDP_3380750_13]**  We're currently launching **Dr Pepper Creamy Coconut**, restaging **Bai WonderWater**, and reinvigorating our hydration business.  **[KDP_3380750_13]**  These initiatives ramp up in **Q2** and will contribute more in the **back half of 2024**.  **[KDP_3380750_13]** 

6. **Alta Brewer System Rollout**  
   **Q:** How engaged are partners in the Alta brewer beta test and rollout?  
   **A:** We've previewed the **Alta system** with all our partners, who are involved every step.  **[KDP_3380750_16]**  Decisions on brand assortment during rollout are in early stages, with active conversations ongoing.  **[KDP_3380750_16]** 

7. **Pod Business Mix and Strategy**  
   **Q:** What's the current mix of pod segments, and any strategy changes?  
   **A:** The pod mix is roughly **50% partners**, **25% owned and licensed**, and **20% private label**.  **[KDP_3380750_17]**  Our strategy remains to be **stewards of the entire category**, focusing on growth.  **[KDP_3380750_17]**  We're investing in innovation and marketing to keep our **owned and licensed brands robust**.  **[KDP_3380750_17]** 

8. **Share Buyback Approach**  
   **Q:** Does increased share buyback reflect a strategic shift from prior years?  
   **A:** The **$4 billion share repurchase authorization** is opportunistic.  **[KDP_3380750_17]**  Our priorities are investing in **organic and inorganic growth** and maintaining a **strong balance sheet** with leverage targets of **2x to 2.5x**.  **[KDP_3380750_17]**  We'll continue buybacks when we see value in our stock price.  **[KDP_3380750_17]** 

9. **Pod Consumption Trends**  
   **Q:** Can you comment on pod consumption trends and innovation cadence?  
   **A:** We saw **sequential improvement** in pod shipments, with Q1 performance at **minus 1%**, significantly better than Q4.  **[KDP_3380750_18]**  We expect a **gradual recovery** in pod volumes throughout the year, supported by innovation initiatives.  **[KDP_3380750_18]** 

10. **Alta Commercialization and Marketing Investments**  
    **Q:** When will Alta beta conclude and commercialization begin? Cadence of marketing spend?  
    **A:** The **Alta beta test** starts in the **fall**, with learnings guiding the rollout.  **[KDP_3380750_18]**  We have a **stacked innovation plan** for cold beverages, and marketing investments will ramp up, particularly in the **back half of the year**.  **[KDP_3380750_18]** 

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- **Keurig Dr Pepper (KDP) is experiencing an uneven and mixed consumer environment**, with pressures on low and middle-income consumers leading to shifts in demand and more pronounced challenges in certain product categories like still beverages.  **[KDP_3394284_11]**
- **At-home coffee volumes remain muted**, with total category trends subdued, and the company does not expect significant improvement in the second half, anticipating only muted revenue contribution from coffee.  **[KDP_3394284_15]**
- **Rising green coffee prices could progressively impact KDP's profits in the second half**, creating headwinds as higher input costs coincide with promotional activities that are at odds with these cost increases.  **[KDP_3394284_18]**

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- **Strategic Partnerships Driving Growth**: Keurig Dr Pepper (KDP) expects partnerships to contribute approximately **200 basis points** to growth in 2024, particularly with brands like **Electrolit** in sports hydration and continued scaling of the **C4 Energy** platform. These partnerships are important growth engines, especially in the second half of the year.  **[KDP_3374551_17]** **[KDP_3374551_12]**
- **Margin Expansion in U.S. Coffee Segment**: KDP has made significant progress in improving operating margins in its U.S. coffee segment, increasing from **30%** in the first half of 2023 to **36%** in Q4. Structural actions such as renegotiating partner contracts are expected to support further margin expansion in 2024.  **[KDP_3374551_13]**
- **Strong International Growth Potential**: KDP has demonstrated a **double-digit CAGR** in its international segment since the merger, nearly doubling the business to almost **$2 billion** in annual sales. The company expects this solid momentum to continue in 2024, with significant runway for growth in international markets.  **[KDP_3374551_12]**

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Keurig Dr Pepper Inc (KDP)

Financials