In 2018, Bob Gamgort—then CEO of coffee K-Cup pod purveyor Keurig Green Mountain—united hot and cold beverages under the same roof for the first time by merging with soft drink giant Dr Pepper Snapple for nearly $19 billion. The combo thrived during the COVID lockdown as the new Keurig Dr Pepper (KDP) deployed AI to parse data flowing from in-home brewers to detect early on that families were rushing to stockpile K-Cups in the stay-at-home economy. That detective work hinted that the trend would soon spread to soft drinks. So KDP stockpiled cans and ramped production of its bestselling Dr Pepper and Canada Dry brands while rivals were short of packaging and capacity. Sales soared when folks rushed to load their garages with 12-packs of their favorite thirst-quenchers.
But since that triumph, the highly original concept of combining hot and cold—based on the conviction that the best strategy meant covering every category of nonalcoholic beverage on a customer’s shopping list—has proved more problematic. While KDP’s sales of refreshment beverages are thriving, the coffee side is proving a drag, and even a distraction for management. In first half 2025 , soft drink revenues leaped 10.7% over the same period last year, while U.S. coffee fell 1.9%, and the international “hot” side dipped 3.8%, a blend that held total sales gains in the quarter to 5.5%. The reason for the coffee downer: A big jump in the price of beans is hiking K-Cup prices and depressing volumes as customers shift to cheaper bagged ground and instant options.
