Keurig Dr Pepper CEO to step down in July

Dive Brief:

  • Keurig Dr Pepper CEO and Chairman Bob Gamgort will be stepping down as of July 29. He will be succeeded by the company’s current CFO and president of the international division, Ozan Dokmecioglu.
  • At the end of July, Gamgort will become the company’s executive chairman for a term of two years, and Dokmecioglu will join the company’s board of directors. The duo will still work closely together, a statement explaining the transition said. As CEO, Dokmecioglu will execute Keurig Dr Pepper’s operational strategy. Gamgort will lead the board of directors and oversee the company’s discretionary cash.
  • Gamgort had been the CEO of the former Keurig Green Mountain since 2016, when the former coffee company went private. When it merged with Dr Pepper Snapple in 2018, Gamgort became the leader of the publicly traded beverage company. Dokmecioglu has been with the company just as long, having been appointed CFO of Keurig Green Mountain in 2016.

Dive Insight:

Nearly four years after overseeing the largest soft-drink merger ever, Gamgort is handing the reins over to one of his long-time lieutenants.

The company has an enviable portfolio of beverages, including both hot and cold beverages. Unlike its top competitors Coca-Cola and PepsiCo, Keurig Dr Pepper has hot coffee through its Keurig platform found in 36 million homes as well as beverages like A&W, 7UP, Snapple and Bai.

Since the formation of the new company, Gamgort has been instrumental in integrating the two companies and growing sales. Last year, Keurig Dr Pepper posted sales of $12.7 billion compared to $11.1 billion in 2019, the first full year of the combined company.

Gamgort also has moved aggressively to take Keurig Dr Pepper into new trendy beverage categories through a series of deals and investments.

It purchased premium water brand Core Nutrition for $525 million in 2018 and caffeinated sparkling water brand Limitless two years later. And an entity affiliated with Keurig Dr Pepper purchased $20 million in shares of Vita Coco at the company’s IPO price in 2021, giving it a meaningful stake in the coconut water maker. The two companies have been long-time partners, with Keurig Dr Pepper accounting for 19% of Vita Coco’s total net sales in 2020.

In picking Dokmecioglu to take over for Gamgort, Keurig Dr Pepper is going with an insider who also has been with the company since the merger. Keurig Dr Pepper recently completed its three-year integration plan for the merger, making now a logical time for a change in leadership at the top. Dokmecioglu is intimately familiar with the company’s finances and position in the marketplace, as well the strategy in place to grow the business.

“We are pleased to appoint Ozan as our next CEO after a thorough succession planning process, including the consideration of internal and external candidates,” Paul Michaels, Keurig Dr Pepper’s lead independent director, said in a statement. “Ozan is an exceptionally strong leader with the skills, experience, values and perspective to lead KDP into the future.” The company is already in the process of recruiting a new CFO.

Gamgort told Bloomberg last October the company was looking for M&A deals up to $20 billion in size, given its robust cash flow. With lots of dry powder to play with, Dokmecioglu will no doubt follow in the footsteps of Gamgort in eyeing brands and companies Keurig Dr Pepper can add to the fold to further expand its beverage offerings.

Even as Dokmecioglu takes the helm, he’ll still have Gamgort to turn to for advice. In addition to serving as executive chairman for two years, Gamgort also has committed to remaining a significant investor in the company, maintaining at least half of his shares during that time.