Keurig Dr Pepper’s rapid transformation from an energy-drink outsider to a major player closing in on double-digit market share in just four years shows how the beverage giant’s disciplined “build-buy-partner” strategy could serve as a blueprint for other CPG players looking to expand into new categories, usage occasion or markets.
Since 2021, KDP’s energy portfolio has grown at an 11% compound annual growth rate from $19 billion and market share that “effectively rounded to zero,” to $30 billion with about 8% market share in the first quarter of 2026, CEO Timothy Cofer told investors at Deutsche Bank’s 23rd annual Global Consumer Conference on June 3.
He attributed the success to the company’s “flexible build-buy-partner approach, characterized by different models, levels of capital investment and commercial arrangements.”
He explained the model can be “tailored to each opportunity and can range from organic brand extensions to capital-light distribution partnerships, like in the case of Electrolit, to equity investments like C4 and Bloom, and finally, to outright acquisitions, like Ghost.”
A key component to the strategy’s success, however, is being “patient and disciplined as we execute this strategy,” he added.
KDP’s growth in energy offers a case study for its build-buy-partner approach
For KDP, the allure of the energy drink market was rooted in its “large and very attractive” $30 billion in annual retail sales and double-digit multiyear CAGR,” Cofer said.
But beyond that, the market’s broad appeal across consumer demographics and extensive fragmentation allowed KDP to take a safer, more stable portfolio approach rather than go all in on one brand or acquisition and risk a costly mistake.
The result is a collection of “complementary brands” serving “distinct consumers and need states” that includes an agreement with Nutrabolt to distribute the female-forward energy beverage brand Bloom, according to the company. This counterbalances KDP’s strategic distribution and product partnership with Black Rifle Coffee, which skews more male and is “unapologetically American,” according to the company.
In the middle of the portfolio’s spectrum are C4, which focuses on maximized performance, and Ghost which is more vibrant and fun with bold flavors.
C4 came to KDP’s portfolio through a 30% stake in Nutrabolt for $863 million in 2022 in which KDP agreed to sell and distribute the energy drink in the majority of its company-owned direct store distribution territories.
Ghost joined KDP portfolio through a more staged traditional acquisition. The deal, announced in October 2024, gave KDP a 60% stake in Ghost and included plans to acquire the remaining 40% in 2028.
This combination of deals and brands positions KDP well to capitalize on growing consumer interest in zero-sugar energy drinks, for which it saw retail sales surge 18% to reach $16 billion between calendar year 2021 and the first quarter of 2026, Cofer said. For comparison, retails sales of “regular” energy drinks grew 4% to $13 billion in the same period, according to KDP, according to the company.
“Each of our brands has significant runway for growth, which supports our goal to achieve a 10% plus market share in the coming years,” Cofer said.
How KDP places its bets on partnerships and acquisitions
When evaluating potential partnerships or acquisitions, KDP looks for “strong stand-alone sales and distribution emergence” as a “prerequisite for partner brands to enter our system,” Cofer said.
“We then look to enhance the standalone contribution through two additional benefits,” he explained. “First, operating leverage as the added volume, obviously reduces our fixed cost per unit, and second, halo effects from additional scale enabling larger drop sizes, greater in-store frequency and stronger outlet level relationships, which, in turn, drives incremental volume and profit for other brands within our portfolio.”
The recipe has allowed KDP to expand its operating margins even as it has grown its partnership mix in recent years.
“We expect a similar dynamic to continue as we build our presence in more white spaces in the future,” Cofer added.
How KDP’s brand building model supports sustainable growth
Brand building in the third leg of KDP’s strategic growth model, which balances on expanded physical availability, increased household penetration and “mental availability,” or “distinctive brand ideas, creative content and cultural relevance,” according to the company.
“To deliver on these objectives, we’ve been enhancing our marketing function with a focus on five key capabilities,” Cofer said.
He explained that includes:
- Deeper consumer insights from better connecting existing databases and integrating new data sets.
- Precision marketing, which uses those consumer insights and improved measurement tools to direct the spend towards the highest return audiences.
- Deploying more impactful creative content including capitalizing on viral cultural moments to build consumer connection.
- Combining the first three capabilities to deliver very personalized and relevant messaging.
- An “innovation engine” that improves success rates and increases incrementality.
“Importantly, all of this is underpinned by advancements in AI capabilities, highly connected first- and third-party data sets and optimized workflows,” Cofer added.
Execution beyond energy
KDP’s energy drink success suggests that the company’s build-buy-partner strategy could be replicated in other areas – allowing it to potentially enter other white spaces through a mix of partnerships, investments, acquisitions and organic growth, rather than relying solely on internal brand development.
