It’s a cloudy afternoon in late March in Burlington, Mass., the Boston suburb that’s the location of co-headquarters for Keurig Dr Pepper. CEO Tim Cofer—who’s simply dropped off his suitcase after arriving from KDP’s second dwelling base in Frisco, Texas, close to Dallas—is guiding Fortune by means of the glass-framed trendy workplace constructing which accommodates a warren of showrooms. One shows all 16 flavors of Dr Pepper, one other exhibits a panoply of recent vitality drinks; strolling down the corridor we go to a gallery arraying dozens of Keurig fashions, from the Okay-Mini for dorm rooms to a business-size brewer at over $1,000.
Between extolling the merchandise in every room, the super-salesman describes the promise of this world of liquids, the place he’s by no means labored earlier than, and his mission for KDP. Cofer is instilling the élan of a scrappy underdog on this old-line company of 29,000 workers. “We’re hungry, we like to disrupt; this is a challenger culture where we play offense, not defense,” he explains, whereas standing earlier than a neon-rainbow rack of cans. “There’s a real sweet spot where a company’s large enough to bring the scale in investment and distribution to win in a big way, but keeps the mindset of being nimble, aggressive, and continually dissatisfied with the status quo,” he says.
It’s what motivated Cofer to woo the 38-year-old entrepreneur who based the favored vitality drink Ghost, and in October strike a $1.65 billion deal to amass the model. The caffeine-like excessive of the Ghost tie-up exemplifies the jolt Cofer’s delivering to make KDP an more and more formidable challenger to the long-ruling kings of beverage, Coca-Cola and PepsiCo. Since becoming a member of KDP first as COO in November of 2023, then as CEO in April of final 12 months, Cofer’s been including fast-growing, high-margin new choices, from vitality and sports activities hydration drinks to refreshers to ready-to-quaff iced coffees, whereas concurrently supercharging the 140-year outdated flagship Dr Pepper as a prime decide for the Instagram era. Thanks largely to snazzy advertising and marketing that’s enticed the quicksilver Gen Y and Gen Z demographic, traditional Dr Pepper has raced from a distant third just some years again to surpass common Pepsi because the second-bestselling mushy drink in North America behind Coke.
Actually, KDP itself—like its signature non-cola—is a one-of-a-kind concoction, the product of a extremely experimental mixing of companies. It’s the only real massive marketer to mix enormous franchises in each cold and hot drinks. That union occurred in mid-2018 by way of the $18.7 billion merger of Dr Pepper Snapple and low maker Keurig Inexperienced Mountain, making KDP by far probably the most diversified enterprise in nonalcoholic or “refreshment” drinks with over 125 manufacturers the place it’s an proprietor, investor, or distributor.
The mating proved a large success throughout the pandemic. Because the disaster started, then-CEO Bob Gamgort, now KDP’s chairman, brilliantly exploited knowledge flowing from dwelling espresso makers wired to knowledge facilities, deploying AI to foresee a spike in demand for espresso and bedrock mushy drink manufacturers within the sudden swap to the stay-at-home economic system. Gamgort ramped up manufacturing of Dr Pepper, Canada Dry, and Okay-Cups, and secured massive shipments of cans from Mexico nicely earlier than rivals noticed the wave constructing. However since 2022, KDP’s espresso gross sales have flattened, pressured by a pointy rise in the price of the uncooked beans that raised the value of Okay-Cup pods and pushed of us towards prompt manufacturers and making their very own. “Now, their crown jewel is beverage, and their problem child is coffee,” notes Connor Rattigan, an analyst at international knowledge supplier Shopper Edge.
To elevate KDP to Coke-and Pepsi-level profitability, Cofer must carry out the robust, twin process of creating high-margin hits on the supercompetitive mushy drink facet, whereas reheating espresso. He’s received massive plans for each.
Although little-known for such an essential CEO, Cofer spent a protracted pre-KDP profession hopping the globe whereas recharging and merging most of the most celebrated manufacturers in client packaged items. The C-suite prized Cofer’s knack for engineering fast turnarounds, and cycled him by means of jobs comparatively rapidly. He would usually put gross sales on the quick monitor, then get the decision to maneuver on.
Cofer grew up in White Bear Lake, Minn., on the outskirts of Minneapolis/St. Paul, that’s famend as a summer season resort for angling largemouth bass, and whose namesake Mark Twain described as “lovely sheet of water.” His father began as a line foreman at a 3M ceramics plant, and rose to turn out to be a advertising and marketing SVP for overhead projectors. The romance of massive enterprise captured Tim round age 7, when he’d be a part of his dad on Saturdays for a drive to 3M’s headquarters in St. Paul. “It instilled upon me the importance of work ethic, because my father would be the only one there. I loved walking around staring at the big desks and big offices. I became fascinated by the prototypes for the newest 3M Thermo-Fax copying machines, and would copy their design in pencil,” he recollects. On the journey dwelling, he’d quiz his father about 3M’s organizational construction and workings of its chain of command.
As a pupil at St. Olaf Faculty close to dwelling, Cofer received his first job because the “arms and legs” of a neighborhood analysis company. He’d go to grocery shops, clipboard in hand, depend the “facings” of Honey Nut Cheerios, Fortunate Charms, and different Common Mills cereals on the cabinets, and report the posted costs, at $2.85 an hour. “I soon figured out that I didn’t want to be recording the data, I wanted to be on the other side, using the data to build a brand,” he recollects. In 1992, he completed his MBA as valedictorian from the College of Minnesota’s Carlson College of Administration, majoring in advertising and marketing, and took a job in Minneapolis at Kraft Meals’ cold-cuts purveyor Oscar Mayer. “I was assistant brand manager for deli meats, maybe not the sexiest of jobs,” he avows. “But I was brand passionate, and it was great foundational learning.”
In 2003, Cofer received his first break when Kraft handed him his introductory basic supervisor function, and management of his personal P&L, as chief of the European chocolate franchise that marketed such feted manufacturers as Milka and Toblerone. Cofer relocated to London and set about instituting a dramatic restructuring mandated by headquarters: shifting authority from nation managers who beforehand exercised full management of their companies to the “regional” degree led by Cofer, who took the brand new place as European VP of chocolate. “This disempowered the country chiefs,” says Ingeborg Gasser-Kriss, Cofer’s innovation chief for Europe. “A newly formed region category team was not something the country heads wanted.” To win Gasser-Kriss’s confidence, Cofer took her on a protracted stroll, for a heart-to-heart speak, on Vienna’s famed Ringstrasse encircling town’s historic heart, wealthy in baroque structure.
That was adopted by a tour visiting all two dozen nation leaders, says Gasser-Kriss. “Tim presented business plans to all of the country teams, and we had dinner with them. He told them, ‘Look, I want us all to agree that if something doesn’t touch the region as a whole, you’ll have all the freedom you need. But if a decision has to be made at the region category, it goes with the region.”
In 2010, Kraft CEO Irene Rosenfeld, Cofer’s mentor, engineered the acquisition of British chocolate-maker Cadbury for $19.6 billion in one of many largest meals trade transactions ever. She instantly despatched Cofer—whom she’d recalled from London in 2007 to first head Oscar Mayer then the Kraft pizza enterprise—to Zurich, to supervise the combination of Kraft and Cadbury chocolate franchises worldwide. The Cadbury deal began as a hostile takeover. “Cadbury was an icon of Britishness from the 1800s,” says Cofer. “They fought the takeover in the business community and the court of public opinion.” Provides Gasser-Kriss, “Cadbury’s proud team called us ‘the American plastic cheese company,’ that’s how much they liked us at the start.”
Rosenfeld had promised massive synergies between the 2 corporations to justify the deal’s excessive worth. “Tim had to navigate through rough waters, a lot of people were nervous,” says Rosenfeld. “He had to tell people on both sides they didn’t have jobs in the organization.” As soon as once more, it was Cofer’s experience in tough-minded diplomacy that received the day. Important to his success was an unlikely partnership he cast with the determine heading chocolate at Cadbury, Bharat Puri. “Two more different people you couldn’t imagine,” recollects Gasser-Kriss. “Bharat was the life of the party, had a great sense of humor, and loved jokes. Tim was a brain person. On the continuum from sincerity to fun he was much on the sincerity side. One time he showed up at an all-day meeting unshaven, without a jacket and tie, and everybody applauded. Bharat told him, ‘You need to relax!’” Gasser-Kriss tremendously admired how Cofer put his deep analytical skills to work when questioning herself and different lieutenants on their challenge proposals that wanted his approval, sans intimidation. “He would always put his finger on the weak spot,” and that made us higher, she remembers. “He was like a precision drone in spotting things that could go wrong.”
Puri recollects that regardless of their odd-couple chasm in persona, he and Cofer joined palms on the best technique for merging the very best of each Kraft and Cadbury to create the powerhouse in chocolate that’s thriving to today below Mondelez. Puri, who’s now managing director of Indian client and specialty chemical substances outfit Pidilite, informed Fortune that, in the beginning of their partnership, Cofer “was too much head and not enough heart. He would tend to be formal and shy.” Gasser-Kriss credit the gregarious Puri with serving to Cofer develop a much bigger public persona. “They learned new sets of behaviors from each other,” she says. “It wasn’t that Tim was introverted, but he developed an engaging, compelling manner in the town hall mode, and may owe that to Bharat’s example.” For Gasser-Kriss, Cofer confirmed one and all his affection for his manufacturers by naming his beloved Maltese Shih Tzu Toblerone.
A stint in Asia troubleshooting Mondelez’s enterprise (and overseeing the wildly profitable launch of Oreo Thins) and a return to the U.S. in 2017 as head of North America below Rosenfeld, then CEO at Mondelez, had Cofer arrange because the main inside candidate to succeed her. As an alternative, the board awarded the prize to Belgian govt Dirk Van de Put, who’d headed McCain Meals of Canada, the world’s largest producer of frozen french fries and potato specialties. “While I was disappointed, it turned out to be a learning experience working with Dirk,” he says. Inside Mondelez, Cofer created a enterprise capital group referred to as SnackFutures that proved a forerunner to the stance he’s taking at KDP. The brand new group backed quirky entrepreneurs to commercialize such improvements as vegan goodies and plant-based cookies, and made Mondelez a most popular accomplice for younger, scorching manufacturers on the rise, presaging Cofer’s buy of Ghost. To measure what tastes would promote, Cofer insisted on junking the outdated system that relied on questionnaires and focus teams. As an alternative, he deployed pop-up stands at faculties and farmers’ markets to conduct on-the-spot style assessments for mothers dropping off their youngsters and health-conscious customers cruising the fruit and veggie cubicles.
Most of all, Cofer claims that he benefited richly by watching the divergent kinds of Rosenfeld and Van de Put. “From them, I learned the importance of situational leadership,” he relates. “With Dirk, it was the high-level attention to detail. Irene was a master of playing the strategic chessboard, who engineered the Cadbury acquisition, which paved the way for the split from Kraft. I was able to study both styles, and choose times when it’s better to bring a high level of intensity, or to step back and examine the big strategic picture.”
Away from the workplace, Cofer’s a giant tennis and snowboarding fan. In each sports activities, it’s been each a household and a worldwide affair. Tim’s two sons, now of their twenties, had been captains of their highschool tennis groups, and his spouse, Jodi, can also be an avid participant. Cofer’s strategy on the courtroom will most likely shock nobody. “I play aggressive,” he says. “I play offense, not defense. I like to rush the net,” not recklessly, he avows, however behind deep, robust strategy pictures. Sitting on the baseline, hitting every thing again, is the antithesis of Tim’s recreation plan for strolling off the winner. The household has visited every of the 4 Grand Slam tournaments in New York, Melbourne, Paris, and London. They’ve additionally globe-trotted on skis, taking to the slopes in locations as far-flung as Sweden, Japan, and the Czech Republic. In music, Cofer loves traditional rock—rap not a lot—and his hero is fellow Minnesotan Bob Dylan, whose vinyl discs entranced him as a teen within the ’70s, and whom he’ll fly midway throughout the U.S. to catch in live performance.
Cofer performs the showman big-time on his video sequence, Style Check With Tim, posted on the KDP web site. On the episodes working round eight minutes every, he and a visitor—both an insider, normally a advertising and marketing or an R&D exec, or a KDP beverage accomplice—pattern a brand new providing. On the exhibits, Cofer rhapsodizes like a espresso and mushy drink sommelier, praising “the toasted coconut notes and creamy notes” of Dr Pepper Creamy Coconut, or the “clean, smooth finish” and “caramel notes” present in a mix of Inexperienced Mountain Espresso. Cofer completed one entry by joyously recapping the KDP promoting mantra, “Brew the Love,” exhorting, “We’re brewin’ the love, baby!”
In 1885—one 12 months earlier than the delivery of Coca-Cola—a pharmacy operator in Waco, Texas, famously blended 23 syrups from his adjoining soda fountain in an experiment to re-create the pharmacy’s aroma. The tangy mix was Dr Pepper. For a lot of many years, the model was mainly a regional favourite within the Southwest. However in 1963, a pivotal authorized resolution declaring that Dr Pepper isn’t a cola helped take it nationwide. That landmark ruling enabled Dr Pepper to win offers the place the community of Coke “Red” and Pepsi “Blue” regional bottlers produced and distributed the model in sundry markets. Over time, Dr Pepper established its personal “Maroon” system of bottlers and distributors that now cowl 80% of the U.S. However Dr Pepper remains to be blended and shipped by Coke and Pepsi franchises in lots of components of the nation. A serious benefit from KDP’s persevering with cooperation with the 2 behemoths: Dr Pepper is served in eating places and fast-food retailers the place both Coke or Pepsi are the unique choices. McDonald’s is Coke-only for cola, and Taco Bell is Pepsi solely; diners can push the darkish purple Dr Pepper button at each.
KDP’s nameplate prospers tremendously from its function because the main sponsor of faculty soccer. This would be the seventh season it’s been airing advertisements conjuring a fantasy suburb dubbed “Fansville” whose twin obsessions are the faculty gridiron and Dr Pepper. Infants emerge from the womb carrying soccer jerseys and sports activities caps. Dad and mom bawl out their youngsters for hiding soccer magazines below their mattresses. Retired soccer star turned actor Brian Bosworth performs a sheriff chugging Dr Pepper from a quart bottle. Cofer’s so all in on “Fansville” that in December he appeared on one in all his Style Check With Tim episodes proven on YouTube on the SEC championships festooned in a Dr Pepper–labeled soccer jersey, declaring, “What’s more classic than home-gating and tailgating!”
The development towards ever zanier mixtures entered a brand new dimension with an explosion in “dirty soda.” Such drinks gained main traction within the Mormon neighborhood, the place of us who’re barred by their faith from consuming alcohol or scorching drinks besides natural tea took to social media asserting that they had been having nice enjoyable slurping these customized bubblies at drive-in chains Swig and Sonic. Within the Hulu actuality sequence The Secret Lives of Mormon Wives, which aired final 12 months, the gamers lauded soiled soda forays as “my Mormon crack” and “kind of our vice.” A giant hit at Swig: “Naughty & Nice,” a swirling mixture of Dr Pepper, English toffee syrup, and half-and-half. By 2023, movies of children touting their outlandish soiled soda recipes abounded on TikTok and Instagram. And a best choice as a canvas for this explosion in wild culinary self-expression was Dr Pepper.
First to pounce was KDP. “We realized we were in a zeitgeist moment that offered a rare opportunity to capitalize on a new cultural idea,” says Cofer. Step one got here in early 2024 when advertising and marketing individuals at KDP huddled with the oldsters at Nestlé selling its nondairy creamer Espresso Mate. Collectively, they crafted the primary mainstream product merging the worlds of espresso creamer and soda, a pairing that was all the fad throughout social media. Their brainchild was Soiled Soda Coconut Lime Taste Liquid Creamer, that includes the Dr Pepper brand on the bottle headlined by “Mix with.” “I approved the idea right away,” says Cofer.
In Could 2024, KDP launched the primary mass-market soiled mushy drink in a can, Dr Pepper Creamy Coconut, which proved to be KDP’s most profitable limited-time providing ever. On Feb. 5, KDP adopted up by launching one other new taste, this one a perennial named Dr Pepper Blackberry, which, based on analyst Rattigan, is contributing to Dr Pepper’s latest positive factors on Pepsi and Coke.
However regardless of the surge, KDP’s profitability lags nicely behind that of Coke and Pepsi. Accounting professional Jack Ciesielski makes use of a yardstick referred to as Money Working Return on Property to evaluate how nicely corporations are deploying all of the capital awarded them by shareholders, excluding the consequences of taxes and leverage. Final 12 months, Coke and Pepsi registered COROA of 11.5% and 13.1%, respectively. For KDP, the determine was a comparatively undistinguished 5.3%.
Nonetheless, that shortfall is a chance. Cofer factors out that whole refreshment drink quantity nationwide grows round 1% yearly, monitoring inhabitants. The important thing to placing the fizz in earnings: attaining a richer combine—promoting the next portion of choices that generate further {dollars} per can and bottle. Therefore, he’s relying on the large transfer into the premium territory of vitality, sports activities hydration, ready-to-drink espresso, and refreshers to elevate margins, whereas deploying gridiron advertising and marketing and catchy new flavors in KDP’s traditional manufacturers to seize share from rivals.
And at last, he’s betting that the launch of Okay-Rounds will invigorate the lagging espresso enterprise. In contrast to the Okay-Cups that encase the pre-brewed espresso in plastic capsules, Okay-Rounds are super-densely-packed mounds of floor beans that don’t have packaging; they arrive in a plant-based coating. Of us will pop the Okay-Rounds into a brand new Keurig espresso maker referred to as the Alta. “Remember, Keurigs today are in 45 million homes. We’re the preeminent system, but we’re willing to reprogram ourselves to provide this totally new product,” Cofer intones. “What’s really exciting is that we’re willing to disrupt ourselves.” For many years, Tim Cofer labored for established giants of client packaged items. However as a pacesetter he’s proving himself to be the un-cola of CEOs—and the giants had higher take be aware.
This story was initially featured on Fortune.com
