Keurig to buy Dr Pepper Snapple Group

Associated Press

NEW YORK

Keurig is buying Dr Pepper Snapple Group, bringing together the make-at-home coffee brand with the company behind Dr Pepper soda, Mott’s apple juice and Snapple iced tea.

The new company, Keurig Dr Pepper, plans to expand its bottled iced coffee offerings that are sold at supermarkets and convenience stores. The private company that controls Keurig already owns coffee brands such as Stumptown and Peet’s.

Keurig Dr Pepper will offer “hot and cold beverages to satisfy every consumer throughout the day,” said Larry Young, chief executive of Dr Pepper Snapple.

And the combined business will tap into each other’s distribution network, bringing their brands to more stores and online retailers. The companies said they’ll save $600 million a year starting in 2021 by combining their warehouse and delivery systems.

The new company will have about $11 billion in annual sales, which still makes it far smaller than soda makers PepsiCo Inc. and Coca-Cola Co., which had 2016 sales of $63 billion and $41 billion, respectively.

Some Snapple flavors are already sold as Keurig pods, but there’s a chance that more of Dr Pepper Snapple’s brands will be turned into pods that are placed into Keurig’s single-serve brewing machines to make drinks.

Keurig’s pods, which are thrown out after they are used, have been criticized by environmental advocates as contributing to more waste. The company previously announced plans to make all its pods, called K-Cups, recyclable by 2020.