Keurig Dr Pepper (KDP) is advancing plans to separate its beverage and coffee businesses, targeting a split in 2027, according to remarks made at the Barclays 19th Annual Global Consumer Conference on September 10 in Boston.
Chief Executive Officer Tim Cofer and Chief Financial Officer Anthony DiSilvestro outlined the company's full-year 2026 guidance, projecting revenue of $25.9 billion to $26.4 billion. That range includes $8.5 billion to $8.7 billion from JDE Peet's, reflecting nine months of ownership following the acquisition's close in early April 2026. Legacy KDP growth is expected to come in at 4% to 6%, with constant-currency EPS rising at a low double-digit pace, bolstered by 6 to 9 percentage points of accretion from the JDE Peet's deal.
Free cash flow is forecast at $2.5 billion for the year, while levered free cash flow over the trailing twelve months came in at $1.97 billion. The company has raised its dividend for five consecutive years and currently carries a yield of 2.87%, against a gross profit margin of 51% and a debt-to-equity ratio of 1.34.
The two proposed new entities — provisionally named BevCo and Global Coffee Co., with corporate names expected to change before launch — would reflect KDP's view of the addressable markets: a $300 billion North American refreshment-beverage market, including a $50 billion carbonated soft-drink segment, and a $400 billion global coffee market growing at roughly 2% annually by volume.
KDP reported that Dr Pepper generates approximately $6 billion in retail sales, ranking second among carbonated soft drinks and first among teens. Dr Pepper Zero Sugar surpassed $1 billion in retail sales and grew 30% in the second quarter. The company also highlighted the relaunch of 7UP with a new lime-over-lemon positioning — its first major refresh in at least 15 years — alongside new flavors including Dr Pepper Creamy Coconut, Dr Pepper Blackberry, and Dr Pepper Strawberries and Cream.
In energy beverages, KDP's portfolio reached a 10% market share, up from virtually nothing four years ago, driven by brands including C4 Energy, Nutrabolt, Ghost (fully acquired), Bloom Nutrition, and Electrolit, distributed through a partnership with Grupo PiSA. Canada Dry continues its "Dry Time is My Time" campaign with the Fruit Splash line.
On the coffee side, KDP noted it is the world's largest buyer of green coffee. U.S. coffee faced a softer second quarter due to green-coffee inflation — with the C-price previously hitting all-time highs — tariffs, and consumer trade-down behavior toward instant and private-label K-Cups. Management characterized these pressures as cyclical.
Cost synergies from the JDE Peet's transaction are targeted at $400 million over three years, with savings expected to ramp in the second half of 2026 and into 2027. Analysts at InvestingPro noted that nine analysts have revised earnings estimates downward for the upcoming period due to near-term coffee headwinds.
KDP's direct-store-delivery system covers roughly 80% of the U.S. population, making it one of only three national coast-to-coast DSD providers. U.S. refreshment-beverage operating margins have expanded about 100 basis points since 2021, and the company has completed more than 25 territory acquisitions over the past eight years.
