Q2 2026 Keurig Dr Pepper Inc Earnings Call

August 6, 2026

Operator: Good morning, ladies and gentlemen, thank you for standing by. Welcome to Keurig Dr Pepper's earnings call for Q2 2026. This conference call is being recorded, and there will be a question-and-answer session at the end of the call. I would now like to introduce Chethan Mallela, Vice President of Investor Relations at Keurig Dr Pepper. Please go ahead.

Speaker #1: ladies and gentlemen, and thank you for standing by. Welcome to Keurig Dr Pepper's earnings call for the second quarter of recorded, and there will be a question-and-answer session at the end of the call.

Speaker #1: Vice President of Investor Relations at Keurig Dr Pepper. Please go ahead.

Chethan Mallela: Thank you. Hello, everyone. Earlier this morning, we issued a press release detailing our Q2 2026 results, which we will discuss on today's call. An accompanying slide presentation is available and can be viewed in real-time on the webcast. Before we get started, I'd like to remind you that our remarks will include forward-looking statements, which reflects KDP's judgment, assumptions, and analysis only as of today. Our actual results may differ materially from current expectations based on a number of factors affecting KDP's business. Except as required by law, we do not undertake any obligation to update any forward-looking statements discussed today. For more information, please refer to our earnings release and the risk factors discussed in our most recent Form 10-K and our latest 10-Q, which will be filed with the SEC in the coming days.

Speaker #2: everyone. Earlier this morning, we issued a press release detailing our second quarter 2026 results, which we will discuss on today's call. And accompanying slide presentation is available and can be viewed in real time on the webcast.

Speaker #2: Before we get started, I'd Which reflects KDP's judgment, assumptions, and analysis only as of today. Our actual results may differ materially from current expectations based on a number of factors affecting KDP's business.

Speaker #2: Accept as required by law, we do not undertake any obligation to update any forward-looking statements discussed today. For more information, please refer to our earnings release and the risk factors discussed in our most recent Form 10-K and our latest 10-Q, which will be filed with the SEC in the coming days.

Speaker #2: Consistent with previous quarters, we will be discussing our Q2 performance on a non-GAAP-adjusted basis, which reflects constant currency growth rates and excludes items comparability.

Chethan Mallela: Consistent with previous quarters, we will be discussing our Q2 performance on a non-GAAP adjusted basis, which reflects constant currency growth rates and excludes items affecting comparability. Definitions and reconciliations to the most directly comparable GAAP metrics are included in our earnings materials. Here with us today to discuss our results are Keurig Dr Pepper's Chief Executive Officer, Tim Cofer, and Chief Financial Officer, Anthony DiSilvestro. I'll now turn it over to Tim.

Speaker #2: Definitions and reconciliations to the most directly comparable GAAP metrics are included in our earnings materials. Here with us today to discuss our results are Keurig Dr Pepper's Chief Executive Officer, Tim Cofer; and Chief Financial Officer, Anthony D.

Speaker #2: Silvestro. I'll now turn it over to Tim.

Speaker #3: Thanks, Chethan, and good morning, everyone. In Q2, we delivered another quarter of strong results. We demonstrated healthy momentum across the majority of our business, led by U.S.

Tim Cofer: Thanks, Chethan, and good morning, everyone. In Q2, we delivered another quarter of strong results. We demonstrated healthy momentum across the majority of our business, led by US Refreshment Beverages. Our performance exceeded our expectations. Halfway through the year, we remain on track to achieve the goals we set at the beginning of 2026, delivering our low double-digit EPS growth guidance, integrating and activating JDE Peet's, and hitting key separation milestones. While we expect the external environment to remain dynamic in the back half, our plans, executional discipline, and year-to-date performance reinforce our confidence in delivering our 2026 guidance while setting up for a successful separation in early 2027. Before turning to our results, let me begin with an update of our transformation work.

Speaker #3: refreshment beverages. And our performance exceeded our expectations. Halfway through the year, we remain on track to achieve the goals we set at the beginning of 2026.

Speaker #3: Delivering our low double-digit EPS growth guidance, integrating an activating JDEPs, and hitting key separation milestones. While we expect the external environment to remain dynamic in the back half, our plans executional discipline and year-to-date performance reinforce our confidence in delivering our 2026 guidance while setting up for a successful separation in early 2027.

Speaker #3: Before turning to our results, let me begin with an update of our transformation work. We successfully closed the acquisition of JDEPs in early April and on day one stood up an interim operating model that is purpose-built to support both near-term delivery and separation readiness.

Tim Cofer: We successfully closed the acquisition of JDE Peet's in early April. On day one, stood up an interim operating model that is purpose-built to support both near-term delivery and separation readiness. The model embeds distinct responsibilities and clear accountability across our KDP Enterprise, Beverage Operating Unit, and Coffee Operating Unit leadership teams, all of which are functioning well as we advance our integration and separation priorities. Let me share some key highlights from our work. We've quickly begun to capture Coffee Co cost synergies, with initial savings flowing through in the second quarter. We have also commenced work to offset anticipated Beverage Co dis-synergies. We've now consolidated our US customers to an integrated sales force and single invoice for the joint Keurig and Peet's portfolio, with the transition completed on schedule and without disruption. We've largely finalized our post-separation organizational structures, including across critical operational, commercial, and finance functions.

Speaker #3: The model embeds distinct responsibilities and clear accountability across our KDP enterprise, beverage operating unit, and coffee operating unit leadership teams, all of which are functioning well as we advance our integration and separation priorities.

Speaker #3: Let me share some key highlights from our work. We've quickly begun to capture coffee co-cost synergies with initial savings flowing through in the second quarter.

Speaker #3: And have also commenced work to offset anticipated beverage co-dis synergies. We've now consolidated our U.S. customers to an integrated sales force and single invoice for the joint Keurig and Pete's portfolio, with the transition completed on schedule and without disruption.

Speaker #3: We've largely finalized our post-separation organizational structures including across critical operational, commercial, and finance functions. We've made significant progress establishing IT and financial reporting readiness for each future company.

Tim Cofer: We've made significant progress establishing IT and financial reporting readiness for each future company. We've begun deleveraging our balance sheet following the JDE Peet's close, reducing pro forma management leverage to 4.4 times at quarter end. This was slightly better than our expectations, and we remain on track to end the year with leverage of 4.1 times. In addition, our search for the future CEO of Global Coffee Co is well underway. The Nominating and Governance Committee of our Board of Directors is leading the process and has engaged a top-tier executive search firm to help identify and evaluate candidates. The role has already attracted considerable interest, and we're confident we will recruit the right CEO to shape and execute Global Coffee Co's value creation strategy. Let's now turn to our second quarter results. Total net sales grew 75%, inclusive of the JDE Peet's acquisition impact.

Speaker #3: And we've begun deleveraging our balance sheet following the JDEPs close reducing pro-forma management leverage to 4.4 times at quarter-end. This was slightly better than our expectations and we remain on track to end the year with leverage of 4.1 times.

Speaker #3: In addition, our search for the future CEO of Global Coffee Co. is well underway. The nominating and governance committee of our board of directors is leading the process and has engaged a top-tier executive search firm to help identify and evaluate candidates.

Speaker #3: The role has already attracted considerable interest and we're confident we will recruit the right CEO to shape and execute Global Coffee Co.'s value creation strategy.

Speaker #3: Let's now turn to our second quarter results. Total net sales grew 75%, inclusive of the JDEPs acquisition impact. Net sales for legacy KDP increased at a high single-digit rate, with both net price realization and volume mix contributing.

Tim Cofer: Net sales for legacy KDP increased at a high single-digit rate, with both net price realization and volume mix contributing. We translated our top-line improvement into significant profit growth, with consolidated operating income up over 40%, and EPS increasing 16% to $0.57. Overall, our second quarter was ahead of our expectations, primarily driven by upside in our JDE Peet's and US Refreshment Beverages segments, including some timing benefits that Anthony will discuss. We also delivered solid results in KDP International, partly offset by subdued trends in US Coffee. Let me walk through each segment in more detail. I'll start with US Refreshment Beverages. Segment net sales and operating income each grew at a double-digit rate in the second quarter, reflecting strength across both our core portfolio and newer growth platforms. Our largest business, carbonated soft drinks, continued to grow nicely.

Speaker #3: We translated our top-line improvement into significant profit growth, with consolidated operating income up over 40% and EPS increasing 16% to $57. Overall, our second quarter was ahead of our expectations.

Speaker #3: Primarily driven by upside in our JDEPs and U.S. refreshment beverages segments. Including some timing benefits that Anthony will discuss. We also delivered solid results in KDP International, partly offset by subdued trends in U.S.

Speaker #3: coffee. Now, let me walk through each segment in more detail. I'll start with U.S. refreshment beverages. Segment net sales and operating income each grew at a double-digit rate, in the second quarter, reflecting strength across both our core portfolio and newer growth platforms.

Speaker #3: Our largest business, Carbonated Soft Drinks, continued to grow nicely. Category trends were healthy, with consumers responding to the compelling value proposition and significant commercial activity from major players.

Tim Cofer: Category trends were healthy, with consumers responding to the compelling value proposition and significant commercial activity from major players. We gained market share in the quarter, led by Dr Pepper. The brand's Dr Pepper Zero Sugar platform sustained its momentum, growing retail sales nearly 30% and gaining more share than any other trademark in the zero sugar space, driven by increasing household penetration. This reflected the benefits of marketing support, increased distribution, and greater display activity. We will continue to deploy these levers to drive further expansion. Dr Pepper franchise trends were also fueled by our Dr Pepper Creamy Coconut limited time offering, which launched in April. The response to the innovation has been positive, with the distribution build, display support, and most importantly, consumer sell-through, all tracking well ahead of Dr Pepper Creamy Coconut's prior market run. Canada Dry also had a robust quarter, with retail sales increasing at a double-digit rate.

Speaker #3: We gained market share in the quarter, led by Dr. Pepper. The brand's zero-sugar platform sustained its momentum, growing retail sales nearly 30%, and gaining more share than any other trademark in the zero-sugar space, driven by increasing household penetration.

Speaker #3: This reflected the benefits of marketing support, increased distribution, and greater display activity, and we will continue to deploy these levers to drive further expansion.

Speaker #3: Dr. Pepper franchise trends were also fueled by our creamy coconut limited-time offering, which launched in April. The response to the innovation has been positive.

Tim Cofer: Dr Pepper franchise trends were also fueled by our Dr Pepper Creamy Coconut limited time offering, which launched in April. The response to the innovation has been positive, with the distribution build, display support, and most importantly, consumer sell-through, all tracking well ahead of Dr Pepper Creamy Coconut's prior market run. Canada Dry also had a robust quarter, with retail sales increasing at a double-digit rate.

Speaker #3: With the distribution build, display support, and most importantly, consumers sell through, all tracking well ahead of creamy coconut's prior market run. Canada Dry also had a robust quarter, with retail sales increasing at a double-digit rate, our fruit splash platform continued to serve as a sustainable growth driver, with this year's highly incremental strawberry launch performing well.

Tim Cofer: Our Canada Dry Fruit Splash platform continued to serve as a sustainable growth driver, with this year's highly incremental strawberry launch performing well. The brand was further supported by our impactful marketing investments, including the recent Dry Time is My Time campaign. Bloom Pop also contributed to our CSD growth. The brand is scaling rapidly, driven by distribution expansion and compelling innovation, and was the leading market share gainer in prebiotic CSDs in the Q2. Moving to energy drinks, our portfolio achieved a key milestone, crossing the 9% market share threshold in the quarter. Bloom and Ghost were two of the top-performing trademarks in the category, underscoring their meaningful consumer resonance and reflecting each brand's great-tasting products, authentic positioning, and social media savvy.

Speaker #3: The brand was further supported by our impactful marketing investments including the recent Dry Time Is My Time campaign. And Bloom Pop also contributed to our CSD growth.

Speaker #3: The brand is scaling rapidly, driven by distribution expansion and compelling innovation, and was the leading market share gainer in prebiotic CSDs in the second quarter.

Speaker #3: Moving to energy drinks. Our portfolio achieved a key milestone, crossing the 9% market share threshold in the quarter. Bloom and Ghost were two of the top performing trademarks in the category, underscoring their meaningful consumer resonance and reflecting each brand's great tasting products, authentic positioning, and social media savvy.

Speaker #3: Growth also came from high-quality front-line execution, to expand distribution points and cooler penetration, as well as compelling innovation, such as Bloom Crisp Apple and Summer Splash, and the Ghost 7Up limited-time offering.

Tim Cofer: Growth also came from high-quality frontline execution to expand distribution points and cooler penetration, as well as compelling innovation such as Bloom Crisp Apple and Summer Splash and the Ghost 7UP limited time offering. C4 Energy recently introduced updated packaging across its performance and ultimate lineups with clearer caffeine and benefit communication, bolder flavor cues, and a simplified visual system. This refresh is designed to improve shelf presence and make the portfolio easier to shop. Early results are encouraging, with a double-digit sales lift and significant velocity increases in geographies where it's present. We expect brand momentum to build as the new packaging rolls out more broadly. Overall, we continue to view our energy portfolio as advantaged with a long runway for each of our brands and good visibility to our double-digit market share goal.

Speaker #3: C4 recently introduced updated packaging across its performance and ultimate lineups, with clearer caffeine and benefit communication, bolder flavor cues, and a simplified visual system.

Speaker #3: This refreshes design to improve shelf presence and make the portfolio easier to shop, and early results are encouraging. With a double-digit sales lift and significant velocity increases in geographies where it's present.

Speaker #3: We expect brand momentum to build as the new packaging rolls out more broadly. Overall, we continue to view our energy portfolio as advantaged. With a long runway for each of our brands, and good visibility to our double-digit market share goal.

Speaker #3: Beyond energy, we also experienced meaningful traction in other high-growth areas of the segment, like sports hydration, coconut water, and seltzer water, all in our U.S.

Tim Cofer: Beyond energy, we also experienced meaningful traction in other high-growth areas of the segment, like sports hydration, coconut water, and seltzer water. All in, our U.S. Refreshment Beverages business continues to enjoy strong momentum. We expect the segment will remain a key growth engine for KDP over the balance of 2026 and beyond. Moving to coffee. We delivered solid results at the enterprise level. We experienced differing dynamics between our U.S. Coffee and JDE Peet's segments. Turning first to U.S. Coffee. Q2 performance was relatively consistent with our Q1, as net sales declined in the low single digits and operating income declined 25%. Year-over-year profit pressure was primarily driven by the impact of significantly higher input costs. As we signaled last quarter, this was due to our hedging approach and inventory positioning, which caused elevated green coffee costs and tariffs to flow through our Q2 P&L.

Speaker #3: refreshment beverages business continues to enjoy strong momentum and we expect the segment will remain a key growth engine for KDP over the balance of 2026 and beyond.

Speaker #3: Moving to coffee, we delivered solid results at the enterprise level but experienced differing dynamics between our U.S. Coffee and JDEP segments. Turning first to U.S.

Speaker #3: coffee. Second quarter performance was relatively consistent with our first quarter, as net sales declined in the low single digits and operating income declined 25%.

Speaker #3: Year-over-year profit pressure was primarily driven by the impact of significantly higher input costs. As we signaled last quarter, this was due to our hedging approach and inventory positioning, which caused elevated green coffee costs and tariffs to flow through our second quarter P&L.

Speaker #3: While we always anticipated subdued segment performance in the quarter, the magnitude was larger than we initially estimated. Top and bottom-line results were impacted by single-serve category volume declines and unfavorable portfolio mix, which reflected increased consumer caution and value-seeking behavior.

Tim Cofer: While we always anticipated subdued segment performance in the quarter, the magnitude was larger than we initially estimated. Top and bottom line results were impacted by single-serve category volume declines and unfavorable portfolio mix, which reflected increased consumer caution and value-seeking behavior. Despite these dynamics, we made progress across the business. Notably, brewer shipments returned to growth, supported by our Great Coffee Without the Grind Keurig marketing campaign. We expect further improvements over the balance of the year. In coffee products, our licensed McCafe K-Cups grew retail sales at a mid-single digit rate and expanded market share, reflecting high-quality commercial execution and effective marketing. Our cold coffee, La Colombe ready-to-drink platform, also drove outsized momentum, growing retail sales over 50% and gaining more than a point of market share, driven by distribution gains, increased display activity, and strong velocity.

Speaker #3: Despite these dynamics, we made progress across the business, notably brewer shipments returned to growth. Supported by our great coffee without the grind, Keurig marketing campaign.

Speaker #3: And we expect further improvements over the balance of the year. In coffee products, our licensed McCafé K-Cups grew retail sales at a mid-single-digit rate and expanded market share, reflecting high-quality commercial execution and effective marketing.

Speaker #3: Our cold coffee La Colombe ready-to-drink platform also drove outsize momentum, growing retail sales over 50% and gaining more than a point of market share, driven by distribution gains increased display activity and strong velocity.

Speaker #3: Importantly, we continue to have line of sight to improving segment trends over the balance of the year. Our cost envelope will become more favorable as lower-cost inventory and improving tariff impacts flow through the P&L.

Tim Cofer: Importantly, we continue to have line of sight to improving segment trends over the balance of the year. Our cost envelope will become more favorable as lower cost inventory and improving tariff impacts flow through the P&L. Our brewer business has started to inflect and should benefit from our commercial activity. We're actioning plans to strengthen trends in pods and other coffee products. Ultimately, we believe our U.S. Coffee segment is beginning to turn a corner as we enter the back half. We remain confident in its long-term growth potential. Moving to the JDE Peet's segment. Quarterly net sales were approximately $2.8 billion and operating income was $414 million. We delivered profitability ahead of our expectations, driven by a couple of factors. First, our teams executed well, particularly in navigating commodity volatility. We maintained pricing discipline as inflationary pressures began to ease, protecting profitability and preserving reinvestment flexibility.

Speaker #3: Our brewer business has started to inflect and should benefit from our commercial activity, and we're actioning plans to strengthen trends in pods and other coffee products.

Speaker #3: Ultimately, we believe our U.S. coffee segment is beginning to turn a corner as we enter the back half and we remain confident in its long-term growth potential.

Speaker #3: Moving to the JDEP segment, quarterly net sales were approximately $2.8 billion and operating income was $414 million. We delivered profitability ahead of our expectations, driven by a couple of factors.

Speaker #3: First, our team's executed well. Particularly in navigating commodity volatility. We maintained pricing discipline, as inflationary pressures began to ease, protecting profitability and preserving reinvestment flexibility.

Speaker #3: In addition, we generated healthy productivity savings through our reignite the amazing program, further enhancing operating income in the quarter. And second, the segment also benefited from favorable timing, which added to the profit upside.

Tim Cofer: In addition, we generated healthy productivity savings through our Reignite the Amazing program, further enhancing operating income in the quarter. Second, the segment also benefited from favorable timing, which added to the profit upside. By brand, L'OR maintained its robust momentum, growing retail sales at a high single-digit rate. Brand performance was broad-based with particular strength in capsules and beans, and was supported by our successful Destinations innovation platform and Awaken the Senses brand marketing campaign. Peet's was another contributor, with retail sales increasing through a combination of pricing and distribution growth. The brand's innovation activity also resonated with consumers, including the launch of Peet's Middle Ground, a half-caffeinated medium roast designed for the afternoon pick-me-up occasion, which achieved healthy on-shelf velocities. Another Coffee segment highlight in the second quarter was the successful integration of JDE Peet's and our legacy Keurig business.

Speaker #3: By brand, lore, maintained its robust momentum, growing retail sales at a high single-digit rate. Brand performance was broad-based, with particular strength in capsules and beans, and was supported by our successful destinations innovation platform and awaken the senses brand marketing campaign.

Speaker #3: Petes was another contributor, with retail sales increasing through a combination of pricing and distribution growth. The brand's innovation activity also resonated with consumers, including the launch of Petes Middle Ground, a half-caffeinated medium-roast designed for the afternoon pick-me-up occasion, which achieved healthy on-shelf velocities.

Speaker #3: Another coffee segment highlight in the second quarter was the successful integration of JDEP and our legacy Keurig business. The newly created Coffee Operating Unit team has collaborated well.

Tim Cofer: The newly created Coffee Operating Unit team has collaborated well, establishing integrated business plans, executing unified commercial programs, and beginning to generate initial cost synergies, which are set to build over the balance of the year. In summary, we're pleased with JDE Peet's second quarter results and expect this business will be a significant contributor to our performance in 2026 and over the long term. Finally, our KDP International segment strengthened from the first quarter, as we expected, with net sales growing at a double-digit rate and operating income flat versus the prior year. Segment performance was balanced across our two key markets. In Mexico, pricing was a key driver, but our business also returned to volume growth as the impact of the beverage tax eased. Peñafiel's Ades and Twist platforms each grew retail sales at robust double-digit rates, driven by distribution expansion and in-store execution.

Speaker #3: Establishing integrated business plans. Executing unified commercial programs. And beginning to generate initial cost synergies which are set to build over the balance of the year.

Speaker #3: In summary, we're pleased with JDEP's second quarter results, an expect this business will be a significant contributor to our performance in 2026 and over the long term.

Speaker #3: And finally, our KDP international segment strengthened from the first quarter as we expected, with net sales growing at a double-digit rate and operating income flat versus the prior year.

Speaker #3: Segment performance was balanced across our two key markets. In Mexico, pricing was a key driver. But our business also returned to volume growth as the impact of the beverage tax eased.

Speaker #3: Peña Fial's AIDS and Twist platforms each grew retail sales at robust double-digit rates driven by distribution expansion and in-store execution. Our teams also capitalized on sports enthusiasm through creative marketing activations featuring squirt, Peña Fial mineral water, and clemato, as the green, white, and red of the Mexican flag.

Tim Cofer: Our teams also capitalized on sports enthusiasm through creative marketing activations featuring Squirt, Peñafiel mineral water, and Clamato as the green, white, and red of the Mexican flag. This activity contributed to healthy Q2 trends for each of these brands. Canada growth was similarly broad-based. Our cold beverage performance was driven by a combination of pricing and volume mix, with robust trends across CSDs, alcohol alternatives, and newer categories like energy and ready-to-drink tea. In coffee, growth was led by price, though both pod and brewer shipments were also positive, underscoring the health of the Keurig ecosystem in Canada. Overall, we have momentum in our KDP International segment and expect the business to deliver solid results over the balance of the year. In closing, our Q2 results capped a successful H1 of 2026.

Speaker #3: This activity contributed to healthy second quarter trends for each of these brands. Canada growth was similarly broad-based. Our cold beverage performance was driven by a combination of pricing and volume mix, with robust trends across CSDs, alcohol alternatives, and newer categories like energy and ready-to-drink tea.

Speaker #3: In coffee, growth was led by price. Though both pod and brewer shipments were also positive, underscoring the health of the Keurig ecosystem in Canada.

Speaker #3: Overall, we have momentum in our KDP international segment and expect the business to deliver solid results over the balance of the year. In closing, our second quarter results capped a successful first half of 2026.

Speaker #3: We exceeded our EPS expectations for the quarter, reinforcing visibility to our full-year guidance. We closed the JDEP acquisition and quickly advanced integration activities, including synergy workstreams.

Tim Cofer: We exceeded our EPS expectations for the Q2, reinforcing visibility to our full year guidance. We closed the JDE Peet's acquisition and quickly advanced integration activities, including synergy work streams. We made important progress on key separation milestones. While there is still meaningful work ahead in the H2. We're confident in our ability to deliver on our 2026 commitments while advancing preparations to establish two world-class standalone companies. With that, I'll turn the call over to Anthony to walk through our financial results and outlook in more detail.

Speaker #3: And we made important progress on key separation milestones. While there is still meaningful work ahead in the back half, we're confident in our ability to deliver on our 2026 commitments while advancing preparations to establish two world-class standalone companies.

Speaker #3: And with that, I'll turn the call over to Anthony, to walk through our financial results and outlook in more detail.

Speaker #1: Thanks, Tim. And good morning, everyone. Our second quarter results were driven by strong execution, a dynamic operating environment, and the incremental contribution from JDEP.

Anthony DiSilvestro: Thanks, Tim, good morning, everyone. Our Q2 results were driven by strong execution in a dynamic operating environment and the incremental contribution from JDE Peet's. Consolidated net sales grew 74.6% in the Q2, reflecting the JDE Peet's acquisition, which closed on 1 April. Excluding the JDE Peet's contribution, legacy KDP net sales grew 7.3%. Growth for legacy KDP was balanced, with net price realization contributing 4.2 percentage points and volume mix adding 3.1 points. By segment, legacy KDP's top line was led by double-digit increases in U.S. Refreshment Beverages and KDP International, partly offset by a low single-digit decline in U.S. Coffee. Consolidated gross margin was 46.5%, 860 basis points below the prior year, primarily due to the mix impact of adding JDE Peet's to the portfolio.

Speaker #1: Consolidated net sales grew 74.6% in the quarter reflecting the JDEP's acquisition, which closed on April 1. Excluding the JDEP's contribution, legacy KDP net sales grew 7.3%.

Speaker #1: Growth for legacy KDP was balanced with net price realization contributing 4.2 percentage points and volume mix adding 3.1 points. By segment, legacy KDP's top line was led by double-digit increases in US refreshment beverages and KDP International partly offset by a low single digit decline in U.S.

Speaker #1: coffee . Consolidated gross margin was 46.5% , 860 basis points below the prior year , primarily due to the mix impact of adding JDE piece to the portfolio .

Speaker #1: Excluding the acquisition impact, gross margin contracted 210 basis points, as elevated cost pressures more than offset the benefits of pricing and productivity. While gross margin for legacy KDP declined as a percent of sales on an absolute basis, gross profit dollars increased 3.2%.

Anthony DiSilvestro: Excluding the acquisition impact, gross margin contracted 210 basis points as elevated cost pressures more than offset the benefits of pricing and productivity. While gross margin for legacy KDP declined as a percent of sales, on an absolute basis, gross profit dollars increased 3.2%. SG&A as a percent of sales declined 400 basis points. Excluding the mix impact from JDE Peet's, SG&A leveraged 100 basis points, driven primarily by productivity savings and disciplined cost management. In total, Q2 operating income increased 42.9%. Including the below-the-line impact from acquisition financing, EPS increased 16.3% to $0.57. Turning now to our segment results. U.S. Refreshment Beverages net sales increased 10%, driven by 6.5 percentage points of volume mix growth and 3.5 points of net price realization. Growth was broad-based, led by energy, CSDs, water, and sports hydration.

Speaker #1: As a as a percent of sales declined 400 basis points . Excluding the mix impact from JD Peet's S G&A leveraged 100 basis points driven primarily by productivity savings and disciplined cost management .

Speaker #1: In total , Q2 operating income increased 42.9% and including the below the line impact from acquisition financing EPS increased 16.3% to $0.57 . Turning now to our segment results .

Speaker #1: U.S. Refreshment Beverages Net sales increased 10% , driven by 6.5 percentage points of volume mix growth and 3.5 points of net price realization .

Speaker #1: Growth was broad-based, led by energy, CSDs, water, and sports hydration. Segment operating income grew 11.9% as net sales growth and productivity savings more than offset cost inflation. Moving to coffee, our performance in aggregate was solid but varied across the segments, with pressure in the U.S.

Anthony DiSilvestro: Segment operating income grew 11.9% as net sales growth and productivity savings more than offset cost inflation. Moving to coffee. Our performance in aggregate was solid but varied across the segments with pressure in U.S. Coffee counterbalanced by strong results for JDE Peet's. The divergence was primarily driven by operating factors, which I'll discuss shortly. However, I'd also like to highlight a reporting dynamic that affected segment comparisons in the quarter. With the closing of the acquisition at the beginning of April, the partner economics for Peet's K-Cups, previously reported in U.S. Coffee, shifted to the JDE Peet's segment. We have since integrated distribution and transitioned Peet's to a unified Keurig invoice, and as a result, the full sales and profit recognition for Peet's K-Cups will reside in U.S. Coffee going forward.

Speaker #1: coffee counterbalanced by strong results for JD Peet's . The divergence was primarily driven by operating factors , which I'll discuss shortly However , I'd also like to highlight a reporting dynamic that affected segment comparisons in the quarter , with the closing of the acquisition at the beginning of April .

Speaker #1: The partner economics for Pete's K-cups previously reported in U.S. Coffee shifted to the JD Pete segment . We have since integrated distribution and transition to Peet's to a unified Keurig invoice , and as a result , the full sales and profit recognition for Peet's K-cups will reside in U.S.

Speaker #1: coffee . Going forward . These reporting shifts had an unfavorable impact on U.S. coffee in Q2 , and will be a benefit in the back half , with the opposite effect on our J.D.

Anthony DiSilvestro: These reporting shifts had an unfavorable impact on U.S. Coffee in Q2 and will be a benefit in the H2 with the opposite effect on our JDE Peet's segment. Importantly, these changes are neutral at the KDP Enterprise level. With that background, let's now discuss the specific trends in each of our coffee segments. Starting with U.S. Coffee, Q2 net sales declined 3.2%, with volume mix driving an 8.2 percentage point decline. POD shipments declined 11.6% on an as-reported basis and 8.3% excluding the impact of the Peet's reporting shift. The decrease primarily reflected subdued category trends in the quarter. Brewer shipments increased 2.1%, returning to growth through impactful marketing and commercial activity, as well as the benefit from lapping prior year retailer destocking.

Speaker #1: Pete segment Importantly , these changes are neutral at the KDP enterprise level . With that background , let's now discuss the specific trends in each of our coffee segments , starting with U.S.

Speaker #1: coffee . Second quarter net sales declined 3.2% , with volume mix driving an 8.2 percentage point decline Pod shipments declined 11.6% on an .

Speaker #1: As reported basis and 8.3% excluding the impact of the Peet's reporting shift . The decrease , primarily reflected subdued category trends in the quarter Brewer shipments increased 2.1% , returning to growth through impactful marketing and commercial activity , as well as the benefit from lapping prior year retailer destocking Net price realization contributed five percentage points to growth , driven by carryover pricing actions from 2025 .

Anthony DiSilvestro: Net price realization contributed 5 percentage points to growth, driven by carryover pricing actions from 2025. Turning to profit, segment operating income declined 24.7%, driven by continued cost pressure from green coffee inflation and tariff impacts. The volume mix decrease and increased marketing spending also played a role, partially offset by net price realization and productivity savings. While we continue to expect subdued segment results for the full year, our cost profile should improve in the coming quarters, and we have good line of sight to improving profit trends in the H2. Our JDE Peet's segment generated $2.8 billion in net sales and $414 million in operating income in the Q2, exceeding our expectations. Segment profitability was primarily driven by favorable pricing net of cost inflation, along with robust productivity savings.

Speaker #1: Turning to profit segment operating income declined 24.7% , driven by continued cost pressure from Green Coffee inflation and tariff impacts . The volume mix decrease and increased marketing spending also played a role , partially offset by net price realization and productivity savings While we continue to expect subdued segment results for the full year , our cost profile should improve in the coming quarters , and we have good line of sight to improving profit trends in the back half .

Speaker #1: Our J.D. Pete segment generated $2.8 billion in net sales and $414 million in operating income in the second quarter, exceeding our expectations. Segment profitability was primarily driven by favorable pricing, net inflation, along with robust productivity savings.

Speaker #1: The business also benefited from timing factors , including related to the recognition of derivative gains , as well as some marketing phasing . Looking ahead , we expect continued healthy results for J.D.

Anthony DiSilvestro: The business also benefited from timing factors, including related to the recognition of derivative gains, as well as some marketing phasing. Looking ahead, we expect continued healthy results for JDE Peet's over the balance of the year, particularly as synergies build in the H2. That said, we now believe our Q2 operating profit likely represents the high-water mark for JDE Peet's quarterly earnings contribution in 2026, based on the timing benefits I just discussed, as well as the impact of the Peet's K-Cup transition to U.S. Coffee in the H2. In our KDP International segment, both revenue and profit trends improved sequentially from the Q1, consistent with our expectations. Net sales grew 12.4%, driven by 6.5 percentage points from volume mix gains and 5.9 points from net price realization. Segment operating income was flat versus the prior year.

Speaker #1: Pete's, over the balance of the year—particularly as synergies build in the second half. That said, we now believe our second quarter operating profit likely represents the high water mark for J.D.

Speaker #1: Pete's quarterly earnings contribution in 2026 . Based on the timing , benefits . I just discussed , as well as the impact of the Pete K-Cup transition to U.S.

Speaker #1: coffee in the back half In our KDP international segment , both revenue and profit trends improved sequentially from the first quarter . Consistent with our expectations Net sales grew 12.4% , driven by 6.5 percentage points from volume mix gains and 5.9 points from net price realization .

Speaker #1: Segment operating income was flat versus the prior year Benefits from net sales growth and productivity savings were offset by higher costs , including green coffee inflation and the Mexico Beverage tax .

Anthony DiSilvestro: Benefits from net sales growth and productivity savings were offset by higher costs, including green coffee inflation and the Mexico beverage tax, as well as increased marketing investments. Turning to the balance sheet and cash flow. We generated healthy free cash flow of $714 million in Q2, driven by strong EBITDA and good cash conversion, including improved working capital trends, particularly in inventory. We continue to target approximately $2.5 billion in free cash flow for the full year. Our cash generation supported our deleveraging goals with pro forma management leverage of 4.4 times at quarter end, slightly better than our expectations. We continue to expect to end the year with management leverage of approximately 4.1 times. Our capital allocation priorities remain unchanged.

Speaker #1: As well as increased marketing investments . Turning to the balance sheet and cash flow , we generated healthy , free cash flow of $714 million in the second quarter , driven by strong EBITDA and good cash conversion , including improved working capital trends , particularly in inventory We continue to target approximately $2.5 billion in free cash flow for the full year Our cash generation supported our deleveraging goals with proforma management leverage of 4.4 times a quarter end , slightly better than our expectations We continue to expect to end the year with management leverage of approximately 4.1 times our capital allocation priorities remain unchanged in the near term .

Anthony DiSilvestro: In the near term, we are focused on three areas: investing in our business, maintaining our current dividend, and paying down debt, consistent with our commitment to investment-grade credit ratings for KDP, Beverage Co., and Global Coffee Co. Looking ahead, we expect each business to deleverage quickly, which will provide greater capital deployment optionality over the medium to long term. With that, let me close with our full year guidance, which we are reaffirming. For the total company, we expect net sales in a range of $25.9 to $26.4 billion, including an $8.5 to $8.7 billion contribution from JDE Peet's. We continue to expect legacy KDP to grow 4% to 6% in constant currency, but now see the high end of the range as most likely. On the bottom line, we are reaffirming our outlook for low double-digit constant currency EPS growth.

Speaker #1: We are focused on three areas investing in our business , maintaining our current dividend and paying down debt Consistent with our commitment to investment grade credit ratings for KDP Beverage Co and Global Coffee Co Looking ahead , we expect each business to deleverage quickly , which will provide greater capital deployment optionality over the medium to long term With that , let me close with our full year guidance , which we are reaffirming for the total company .

Speaker #1: We expect net sales in a range of $25.9 to $26.4 billion, including an $8.5 to $8.7 billion contribution from J.D. EPS. We continue to expect legacy KDP to grow 4% to 6% in constant currency, but now see the high end of the range as most likely on the bottom line.

Speaker #1: We are reaffirming our outlook for low double-digit constant currency EPS growth. This consists of an anticipated 6 to 7 percentage point contribution from the J.D.

Anthony DiSilvestro: This consists of an anticipated six to seven percentage points contribution from the JDE Peet's acquisition and 4% to 6% constant currency growth for legacy KDP. Based on current rates, we continue to expect an approximately one percentage point FX tailwind to total company net sales and EPS growth for the full year. While our EPS outlook is unchanged, there are two new elements to highlight. First, during Q2, we completed the initial JDE Peet's purchase price allocation. This resulted in higher fixed asset depreciation expense for the acquired entity than we previously anticipated, and our guidance now incorporates an incremental 2% non-cash expense headwind to 2026 EPS versus our prior view. Second, our outlook also now includes an anticipated one-time cash benefit from tariff refunds. On a net basis, we expect these two factors to largely offset, resulting in a neutral impact to our full-year EPS outlook.

Speaker #1: pizza acquisition , and 4 to 6% constant currency growth for legacy KDP . Based on current rates , we continue to expect an approximately one percentage point FX tailwind to total company net sales and EPS growth for the full year .

Speaker #1: While our EPS outlook is unchanged . There are two new elements to highlight First , during the second quarter , we completed the initial J.D.

Speaker #1: Peet's purchase price allocation This resulted in higher fixed asset depreciation expense for the acquired entity than we previously anticipated , and our guidance now incorporates an incremental 2% non-cash expense headwind to 2026 EPS versus our prior view Second , our outlook also now includes an anticipated one time cash benefit from tariff refunds on a net basis .

Speaker #1: We expect these two factors to largely offset , resulting in a neutral impact to our full year EPS outlook Moving to below the line metrics .

Anthony DiSilvestro: Moving to below the line metrics, we are now assuming the following. Interest expense of approximately $1.12 to $1.14 billion. An effective tax rate of approximately 22% to 23%, approximately 1.37 billion diluted weighted average shares outstanding, approximately $190 million in pre-tax coffee JV costs, and convertible preferred P&L costs based on the securities approximately 8% proportionate share of earnings. In closing, we delivered a strong Q2. Exiting H1, we are well-positioned to meet our full-year commitments while also preparing KDP for its exciting next chapter. With that, I will turn the call back to Tim for closing remarks.

Speaker #1: We are now assuming the following interest expense of approximately 1.12 to $1.14 billion and an effective tax rate of approximately approximately 1.37 billion diluted weighted average shares outstanding .

Speaker #1: Approximately $190 million in pre-tax coffee . JV costs and convertible preferred personnel costs . Based on the securities Approximately 8% proportionate share of earnings .

Speaker #1: In closing , we delivered a strong second quarter . Exiting the first half , we are well positioned to meet our full year commitments while also preparing KDP for its exciting next chapter .

Speaker #1: With that , I will turn the call back to Tim for closing remarks Thanks , Anthony As said , we're pleased with our strong second quarter results , which are a testament to the capabilities and hard work of our global team .

Tim Cofer: Thanks, Anthony. As said, we're pleased with our strong Q2 results, which are a testament to the capabilities and hard work of our global team. I want to recognize and thank our more than 50,000 colleagues from around the world for their contributions to our inaugural quarter as a newly combined organization. Spending time with our teams in Amsterdam and Boston has reinforced my passion, enthusiasm, and confidence in the future Global Coffee Co. I'm equally energized by the future Beverage Co. business, which continues to deliver outsized performance and is well-positioned for standalone success. Indeed, our teams are executing with discipline across both coffee and beverages, enabling KDP to deliver on our near-term objectives while making meaningful progress on integration and separation work streams.

Speaker #1: I want to recognize and thank our more than 50,000 colleagues from around the world for their contributions to our inaugural quarter . As a newly combined organization , spending time with our teams in Amsterdam and Boston has reinforced my passion , enthusiasm and confidence in the future .

Speaker #1: Global Coffee Co and I'm equally energized by the future Beverage Co business , which continues to deliver outsized performance and is well positioned for standalone success Indeed , our teams are executing with discipline across both coffee and beverages , enabling KDP to deliver on our near-term objectives while making meaningful progress on integration and separation .

Speaker #1: Workstreams We have good momentum and well calibrated plans for the balance of the year , and look forward to a strong finish to 2026 .

Tim Cofer: We have good momentum and well-calibrated plans for the balance of the year and look forward to a strong finish to 2026 while laying the groundwork for our separation in early 2027. With that, we're now happy to take your questions.

Speaker #1: While laying the groundwork for our separation in early 2027 . And with that , we're now happy to take your questions .

Speaker #2: We will now begin the question and answer session . To ask a question , you may press star , then one on your touchtone phone If you are using a speakerphone , please pick up your handset before pressing the keys .

Operator: We will now begin the question and answer session. To ask a question, you may press star one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star two. We ask that you please limit yourself to one question. At this time, we will pause momentarily to assemble our roster. The first question today comes from Chris Carey with Wells Fargo. Please go ahead.

Speaker #2: If at any time your question has been addressed and you would like to withdraw your question , please press star then two . We ask that you please limit yourself to one question .

Speaker #2: At this time , we will pause momentarily to assemble our roster The first question today comes from Chris Carey with Wells Fargo . Please go ahead

Speaker #3: Hi . Good morning everyone . I wanted to ask about the strength that you're seeing in the US refreshment business Certainly it continues to come in very strong .

Chris Carey: Hi. Good morning, everyone. I wanted to ask about the strength that you're seeing in the U.S. Refreshment business. Certainly, it continues to come in very strong. Can you help us understand the contributions of your underlying owned business, how partners are contributing to the business, and expectations going into the back half of the year? I'm mindful that the outlook for the higher end of the net sales ex currency, excluding JDEP, does imply a deceleration into the back half. U.S. Refreshment is obviously a key enabler of your total company growth. I would just love to get a bit more sense of what's driving Q2, how you see the segment performing into the back half of the year, and perhaps some construct for volume mix versus pricing. Thank you.

Speaker #3: Can you help us understand the of your underlying owned business ? How partners are contributing to the business and expectations going into the back half of the year ?

Speaker #3: I'm mindful that the outlook , , you know , for the higher end of the net sales ex currency , , excluding GDP .

Speaker #3: Does imply a deceleration into the back half . U.S. refreshment is obviously a key , enabler of your total company growth . So I would just love to get a bit more sense of what's driving Q2 how you see the segment performing into the back half of the year , and perhaps some , you know , construct for volume mix versus pricing .

Speaker #3: Thank you .

Speaker #1: Good morning Chris . Yeah , we feel very good about the performance of U.S. refreshment beverages again here this quarter . You saw the double digit top and bottom line performance .

Tim Cofer: Good morning, Chris. Yeah, we feel very good about the performance of U.S. Refreshment Beverages. Again, here this quarter, you saw the double-digit top and bottom line performance, and that was led by a 6.5% increase in volume mix. When you look at the drivers of the strength of that volume mix performance, you start with CSDs, carbonated soft drinks, reflecting healthy category, MSD type performance, and on top of that, market share gains in our portfolio. I talked in the prepared remarks about continued strength of Dr Pepper Zero Sugar, where we saw about a 30% growth on that platform, the Dr Pepper Creamy Coconut LTO, as well as Canada Dry and our Bloom Pop offering within prebiotic CSDs. Really strong performance there.

Speaker #1: And that was led by a 6.5% increase in volume mix . You know , when you look at the drivers of the strength of that volume mix performance , you start with csds carbonated soft drinks reflecting healthy category .

Speaker #1: You know , MSD type performance . And then on top of that , market share gains in our portfolio . I talked in the prepared remarks about continued strength of doctor Pepper , Zero sugar , where we saw about a 30% growth on that platform .

Speaker #1: The creamy coconut LTL , as well as Canada Dry and our Bloom Pop offering within prebiotic csds . So really strong performance there .

Speaker #1: Outsized growth and energy would be the second driver driven by the momentum we have in particular in both bloom and Ghost and good early traction from the brand refresh of C4 .

Tim Cofer: Outsized growth and energy would be the second driver, driven by the momentum we have, in particular, in both Bloom and Ghost, and good early traction from the brand refresh of C4. You go to sports hydration, you see continued strong trends with our Electrolit offering. Finally, I'd point to improving still beverage performance led by waters. To your question, that was the Q2 drivers. What about the balance of the year? We expect, quite honestly, these same drivers to support continued segment momentum. However, we will lap some tougher comps in the back half, we expect the magnitude of the growth, which was double digits so far this year, to moderate a bit relative to H1. It will be another strong year performance in 2026 and sustain the momentum into the separation.

Speaker #1: Then you go to sports hydration . You see continued strong trends with our electrolyte offering and finally , I'd point to improving still beverage performance led by waters .

Speaker #1: So then to your question , you know , that was the Q2 drivers . What about the balance of the year ? We expect , quite honestly these same drivers to support continued segment momentum .

Speaker #1: However , we will lap some tougher comps in the back half . And so we expect the magnitude of the growth , which was double digits .

Speaker #1: So far this year to moderate a bit relative to H1 . It will be another strong year performance in 26 and sustain the momentum into the separation .

Speaker #1: The second part of your question was around partners . And , you know , on that I'd just say , look , you've heard us say we have a very flexible build buy partner model .

Tim Cofer: The second part of your question was around partners. On that, I'd just say, look, you've heard us say we have a very flexible build-by-partner model. It's been a core element of KDP's refreshment beverage strategy for years. It gives us the ability to meet evolving consumer needs while driving growth and profitability across our portfolio. The benefits of this model were evident in our H1 performance. When you look at the contribution, both owned and partner brands each meaningfully contributed to the top and the bottom line. I think you should expect the same going forward. Owned and partner brands will continue to play that important and complementary roles for KDP, you'll see us remain committed to investing in both as part of our balanced growth strategy.

Speaker #1: It's been a core element of CDP's refreshment beverage strategy for years It gives us the ability to to meet evolving consumer needs while driving growth and , and profitability across our portfolio .

Speaker #1: And the benefits of this model were evident in our first half performance . And when you look at the contribution , both owned and partner brands each meaningfully contributed to the top and the bottom line .

Speaker #1: And I think you should expect the same going forward . Owned and partner brands will continue to play that important . And complementary roles for KDP , and you'll see us remain committed to investing in both as part of our balanced growth strategy

Speaker #2: The next question comes from Peter Galbo with Bank of America. Please go ahead.

Operator: The next question comes from Peter Galbo with Bank of America. Please go ahead.

Speaker #4: Hey , good morning . Thanks for taking the question . , Tim , I wanted to go back to your comments around the CEO search for for global Coffee Co .

Peter Galbo: Hey, good morning. Thanks for taking the question. Tim, I wanted to go back to your comments around the CEO search for Global Coffee Co. Obviously, a bit of a restart on the process. It seems like you're making good progress there, but maybe you could help us put a few more guardrails around timing of when we might expect an announcement. I don't know if it's by Q3. I think there's just a bit of concern in the market that any sort of further delay could potentially delay the spin. Maybe you can just help to quell some of those concerns with a bit more finite timeline. Thanks very much.

Speaker #4: , obviously a bit of a restart on the process . It seems like you're making good progress there . But , but maybe you could help us put a few more guardrails around timing of when we might expect an announcement .

Speaker #4: I don't know if it's by Q3 . I think there's just a bit of , , you know , concern in the market that any sort of further delay could , could potentially delay the spin .

Speaker #4: And so maybe you can just help to , to quell some of those concerns with a bit more finite timeline . Thanks very much .

Speaker #1: Thanks , Peter . Yeah . As I said , the search for our future global Coffee co-CEO is well underway . And I would tell you it's progressing nicely , you know , what are we looking for ?

Tim Cofer: Thanks, Peter. Yeah, as said, the search for our future Global Coffee Co. CEO is well underway, and I would tell you it's progressing nicely. What are we looking for? It's a world-class executive with significant and relevant experience to this platform, prior proven success leading scaled global businesses, a strong consumer orientation, a track record of navigating complex market conditions and leading through change. Finally, we're looking for a leader that can build culture, a winning culture, and really generate a lot of followership. I can tell you this role has attracted considerable interest from highly qualified candidates, and we're well on our way through the interview and assessment process. We remain confident we'll have a CEO in place with sufficient time to engage with the business, shape the strategy, ahead of our targeted 2027 separation.

Speaker #1: It's , , you know , a world class executive with significant and relevant experience to this platform . Prior proven success , leading scaled global businesses , a strong consumer orientation , a track record of navigating complex market conditions , and leading through change .

Speaker #1: , finally , you know , we're looking for a leader that can build culture , a winning culture and , and really generate a lot of followership .

Speaker #1: , I can tell you this role has attracted considerable interest from highly qualified candidates . And , you know , we're well on our way through the , you know , interview and assessment process .

Speaker #1: So we remain confident we'll have a CEO in place with sufficient time to engage with the business , shape the strategy ahead of our targeted 2027 separation You know , I I'd say the last thing is we will prioritize finding the right CEO .

Tim Cofer: I'd say the last thing is we will prioritize finding the right CEO. It's critical that we've got the right CEO to really unlock the full potential as a standalone company, and we're not going to compromise on quality and service of speed. We're confident we can do all of this on the timeline we've shared.

Speaker #1: It's critical that we've got the right CEO to really unlock the full potential as a standalone company . And we're not going to compromise on quality and service of speed , but we're confident we can do all of this on the timeline we've shared

Speaker #2: The next question comes from Lauren Lieberman with Barclays . Please go ahead

Operator: The next question comes from Lauren Lieberman with Barclays. Please go ahead.

Speaker #5: Great . Thanks so much . , given green coffee volatility and the prior , you know , pricing actions in 25 . Just where do you believe you are in the pricing recovery cycle ?

Lauren Lieberman: Great. Thanks so much. Given green coffee volatility and the prior pricing actions in 2025, just where do you believe you are in the pricing recovery cycle? Just wondering how we should think about the balance between protecting margins and then restoring volume trends over the next several quarters in coffee. In the prepared remarks, Tim, I know you specifically mentioned plans to strengthen pods and coffee products in H2. In this context, I wanted to hear a little bit more about that. Thanks.

Speaker #5: , just want to know how we should think about the balance between protecting margins and then restoring volume trends over the next several quarters in coffee and in the prepared remarks , Tim , I know you specifically mentioned plans to strengthen pods and coffee products in the second half .

Speaker #5: So in this context , I wanted to hear a little bit more about that . Thanks

Speaker #1: Should we talk first a little about green coffee costs , Anthony , and then I can speak a little bit to pricing . Sure .

Tim Cofer: Should we talk first a little about green coffee costs, Anthony, and then I can speak a little bit to pricing?

Speaker #1: Absolutely . You know , as you know , green coffee costs have been highly volatile in recent years . Inflationary in 24 and early 25 , turning deflationary .

Anthony DiSilvestro: Sure. Absolutely. As you know, green coffee costs have been highly volatile in recent years, inflationary in 2024 and early 2025, turning deflationary as we got into the latter part of 2025 and early 2026. As you've seen, inflationary again in the recent weeks. Just as a reminder, we've talked about this before, there is a lag between those green coffee price movements and when we see it come through the P&L. In terms of the most recent upward move, it's primarily related to speculation about El Niño's potential impact on supply. Because of that, we think it's likely C price could remain volatile until that situation evolves. I'd say from a KDP perspective, our priority is to solve for the operational visibility. We're not sitting here trying to predict future C price movements, and as a result, we typically forward hedge our commodity purchases.

Speaker #1: And as we got into the latter part of 25 and early 26 , and as you've seen , you know , inflationary again in the recent weeks , and just as a reminder , we've talked about this before , there is a lag between those green coffee price movements .

Speaker #1: And when we see it come through the nose , P and L terms of the most recent upward move , it's primarily related to speculation about , you know , El Nino's potential impact , you know , on on supply .

Speaker #1: And , you know , because of that , we think it's likely to see price could remain volatile until that situation . You know , , evolves .

Speaker #1: And I'd say from a katp perspective , you know , our priority is to solve for the operational visibility . We're not sitting here trying to predict future , you know , sea price movements .

Speaker #1: And as a result , we , you know , typically forward hedge our commodity , , purchases . And , you know , there is that lag between coffee prices and when it hits , you know , the P and L and performance in terms of , you know , looking ahead , I'd say in the second half , we have really good line of sight to improving coffee costs that will , you know , move into lower cost inventory .

Operator: There is that lag between coffee prices and when it hits the P&L in performance. In terms of looking ahead, I'd say in H2, we have really good line of sight to improving coffee costs that will move into lower cost inventory, as well as tariff impact easing. The cost position for us in H2 will become more favorable as we look ahead.

Anthony DiSilvestro: There is that lag between coffee prices and when it hits the P&L in performance. In terms of looking ahead, I'd say in H2, we have really good line of sight to improving coffee costs that will move into lower cost inventory, as well as tariff impact easing. The cost position for us in H2 will become more favorable as we look ahead.

Speaker #1: , and as well as tariff impacts easing . So the cost position for us in the second half will become more favorable , or unfavorable .

Speaker #1: , as we look ahead Yeah . And then , you know , I'll just pick up broadly on your pricing question , I guess , obviously first recognized pricing is a topic of high interest across CPG .

Tim Cofer: Yeah, I'll just pick up broadly on your pricing question. I guess, obviously, first recognize pricing's a topic of high interest across CPG, given this overall inflationary envelope we've all had to manage through. Our goal over time at KDP and Beverage Co and Global Coffee Co is to grow sales through a sustainable balance of price, mix, and volume. I think you look at our Q2 print and it's a testament to this objective. KDP, if you look at a legacy KDP, you see a growing volume mix of 3% and a price of 4%. Pretty well-balanced supporting that total sales of seven. You jump into coffee more specifically, no doubt the H1 benefited from carryover pricing, but that will be increasingly anniversaried in the H2.

Speaker #1: Given the overall inflationary envelope . We've all had to , manage through our goal over time at KDP and Bevco and Coffee Co is to grow sales through a sustainable balance of of price mix and volume .

Speaker #1: And I think you look at our Q2 print and it's a testament to , to this objective . KDP if you look at a legacy KDP , you see a growing volume mix of 3% and a price of 4% .

Speaker #1: So pretty well balanced . Supporting that total sales of , of seven , you know , you jump into coffee more specifically , , no doubt the first half benefited from carryover pricing .

Speaker #1: , but that will be increasingly anniversary in the back half . And so in addition , with the coffee cost basket easing , JD Pete's has already implemented some pass through of lower coffee prices and certain formats .

Tim Cofer: In addition with the coffee cost basket easing, JDE Peet's has already implemented some pass-through of lower coffee prices in certain formats and regions. U.S. Coffee, Keurig and K-Cups model is less pass-through in nature and has some different cost phasing that Anthony and I talked about in prepared remarks. We'll also look for opportunities to invest in value for our consumers in the balance of the year. Overall, as you take these factors together, we expect enterprise pricing will probably be less of a net sales contributor in H2 versus H1, primarily due to the coffee dynamics that I discussed.

Speaker #1: And regions . U.S. coffee , you know , Keurig and K-cups model is less pass through in nature and has some different cost phasing that Anthony and I talked about in the prepared remarks .

Speaker #1: But we'll also look for opportunities to invest in value for our consumers . , in the balance of the year overall , you know , as you take these factors together , we expect enterprise pricing will probably be less of a net sales contributor in H2 versus H1 , primarily due to the coffee dynamics that I discussed

Speaker #2: The next question comes from Peter Graham with UBS . Please go ahead

Operator: The next question comes from Peter Grom with UBS. Please go ahead.

Speaker #6: Great . Thank you . Good morning everyone . So I kind of wanted to follow up a little bit on Lauren's question and stick with coffee .

Peter Grom: Great. Thank you. Good morning, everyone. I kind of wanted to follow up a little bit on Lauren's question and stick with coffee, but maybe just more from a U.S. Coffee standpoint. I know coming into the quarter it was expected to be under some pressure, but I think it still came in a bit below your expectations. Can you maybe unpack the weakness, why you think performance fell short? As we look out to the balance of the year, I think you mentioned you'd expect subdued top line with some improvement on profitability. Can you maybe just unpack what that looks like relative to what we saw here in the Q2? Thanks.

Speaker #6: But maybe just more from a US coffee standpoint . And I know coming into the quarter , it was expected to be under some pressure , but I think it still came in a bit below your expectations .

Speaker #6: So can you maybe unpack the weakness , why you think performance fell short ? And as we look out to the balance of the year , I think you mentioned you've expect to do top line with some improvement on profitability .

Speaker #6: Can you maybe just unpack what that looks like relative to what we saw here in the second quarter ? Thanks

Speaker #1: Sure . Peter . So , you know , if you elevate up to our new total coffee business , I think solid results .

Tim Cofer: Sure, Peter. If you elevate up to our new total coffee business, I think solid results, but differing trends across JDE Peet's and U.S. Coffee, U.S. Coffee definitely under a bit of pressure. The Q2 performance for U.S. Coffee was similar to Q1. We knew the H1 would be challenging given the elevated C price impacting our P&L, and it was. In addition, and I think more specifically to your question, the Q2 trends were further impacted by a coffee category slowdown and a bit of unfavorable mix shift to private label, along with some continued trade inventory headwinds on pods. Importantly, I'd say as we look to the H2, we do remain confident that we'll see better trends for U.S. Coffee in the H2 and certainly over the longer term.

Speaker #1: But different trends across Jdp and us , coffee and US coffee definitely under a bit of pressure . So , you know , the Q2 performance for us , coffee was similar to Q1 .

Speaker #1: We knew the first half would be challenging given the elevated C price impacting our P and L , and it was . And in addition , and I think more specifically to your question , that the Q2 trends were further impacted by a coffee category slowdown and a bit of unfavorable mix shift to private label , along with some continued trade inventory headwinds on pods Importantly , I'd say as we look to the back half , we do remain confident that we'll see better trends for U.S.

Speaker #1: coffee in the second half and certainly over the long longer term . In the near term , the input cost envelope is set to become more favorable in the back half , reflecting the timing of cost flow through due to our hedging and inventory positioning .

Tim Cofer: In the near term, the input cost down below is set to become more favorable in the H2, reflecting the timing of cost flow-throughs due to our hedging and inventory positioning. We believe volume mix will start to improve as trade inventory dynamics in pods begin to normalize. In addition to that, we think we'll benefit from some good ROI to support our sustainable long-term growth initiatives around pod and brewer innovations that we've got loaded for the H2, our precision marketing campaign specifically driving Keurig brewer sales and incremental household penetration. We believe we will be growing household penetration in the H2 on Keurig brewers. I think these initiatives will support both a category growth improvement and KDP share improvement as we go to the H2.

Speaker #1: And we believe volume mix will start to improve as trade inventory dynamics and pods begin to normalize . And then , in addition to that , we think we'll benefit from some good ROI to support our sustainable long term growth initiatives around pod and brewer innovations that we've got loaded for the back half hour precision marketing campaign , specifically driving Keurig brewer sales and incremental household penetration .

Speaker #1: And we believe we will be growing household penetration in the back half . On Keurig brewers . So I think these initiatives will support both a category growth improvement and KDP share improvement as we go to the back half .

Speaker #1: So in aggregate , I do anticipate a subdued full year 2026 for U.S. coffee , but a significantly improved second half

Tim Cofer: In aggregate, I do anticipate a subdued full year 2026 for U.S. Coffee, but a significantly improved H2.

Speaker #2: The next question comes from Robert Ottenstein with Evercore. Please go ahead.

Operator: The next question comes from Robert Ottenstein with Evercore. Please go ahead.

Speaker #7: Great . Thank you very much . I was just wondering if you could remind us , , about , you know , the bloom brand .

Robert Ottenstein: Great. Thank you very much. I was just wondering if you could remind us about the Bloom brand. It really looks like a phenomenal brand that has broad shoulders. Can you remind us what your ownership stake is, how it hits your income statement? I know you do distribution. Do you do manufacturing? What is the long-term plan for the brand? Is there any possibility of buying it and gaining control? All those sorts of questions, again, really in the context of what an attractive brand this is. Thank you.

Speaker #7: It really looks like a phenomenal brand that has , you know , broad shoulders , , so can you remind us , you know , what your ownership stake is , how it hits your income statement ?

Speaker #7: , I know you do distribution . Do you do manufacturing ? , you know , what is the long term plan for the brand ?

Speaker #7: Is there any possibility of , of buying it and gaining control ? All those sorts of questions . , again , really in the context of , you know , what an attractive brand this is .

Speaker #7: Thank you

Speaker #1: We certainly , , share your view . Robert , on the attractiveness of the bloom brand and , , you know , we have a tremendous relationship with NutriBullet and the founders of bloom .

Tim Cofer: We certainly share your view, Robert, on the attractiveness of the Bloom brand. We have a tremendous relationship with Nutrabolt and the founders of Bloom. In fact, just last week, we had a meeting here in Dallas with both Nutrabolt founder and Bloom founder. We've got exciting plans for the back half and for 2027 to continue to grow this brand. This brand, as you know, is what we'd call a bit of a female-forward brand. It's done a tremendous job in both active nutrition powders, in energy, and in prebiotic sodas of attracting quite a following. There's a tremendous amount of social savvy there, excellent capabilities in developing winning flavors. Our customer partners are giving us appropriate focus and attention in terms of distribution and through our DSD capability, a lot of incremental displays. Love the brand and see continued robust growth potential going forward.

Speaker #1: In fact , just last week , , we had a meeting here in Dallas with both NutriBullet founder and bloom founder and , , we've got exciting plans for the back half and for 27 to continue to grow this brand , this brand , as you know , is , you know , what we call a bit of a female forward brand .

Speaker #1: , it's done a tremendous job in both , , you know , active nutrition powders in energy and in prebiotic sodas of attracting quite a following .

Speaker #1: , there's a tremendous amount of social savvy there . , excellent capabilities in attracting and developing , , winning flavors and , , you know , our customer partners are giving us appropriate , , focus and attention in terms of distribution and , , through our DSD capability , a lot of incremental displays .

Speaker #1: So , love the brand and see continued robust growth potential going forward from a ownership standpoint , you know , bloom is , , part of the neutral , , organization where there's a strong ownership there .

Tim Cofer: From an ownership standpoint, Bloom is part of the Nutrabolt organization, where there's a strong ownership there. We have a long-term partnership with Nutrabolt that obviously covers both C4 and Bloom. We own a 36% stake in Nutrabolt and actually have multiple board seats. That's the ownership stake that you had asked about. Overall, I'd say we're just excited to continue to work very closely with Das, the founder of Nutrabolt, with Bloom's founder, and we're quite bullish on our ability to drive mutual value creation in the years to come.

Speaker #1: And we have a long term partnership with NutriBullet for that obviously covers both C4 and bloom . And we own a 36% stake in NutriBullet .

Speaker #1: And actually have multiple board seats . , so that is , , that's the ownership stake that , , that you had asked about .

Speaker #1: And , , you know , overall I'd say we're just excited to continue to work very closely with DOS , , the founder of NutriBullet with Bloom's founder and , , we were quite bullish on our ability to drive mutual value creation in the years to come

Operator: The next question comes from Robert Moskow with TD Cowen. Please go ahead.

Speaker #2: The next question comes from Robert Moskow with TD Cowen . Please go ahead .

Speaker #8: Hey , , thank you for the question . , I was intrigued by your comment about the joint business plans that are now , , have been taking place between Keurig and Jdp .

Robert Moskow: Hey, thank you for the question. I was intrigued by your comment about the joint business plans that now have been taking place between Keurig and JDEP. Can you give a little more detail on what they're able to do on a joint basis? I think the perception out there is that these are still two very separate geographic businesses. Then maybe drill in a little bit on the synergies. Originally, the expectation is that you could get some synergies in coffee procurement. I wanted to know, in this very volatile environment, is it still possible to get those synergies, or are there any complexities that happen when coffee gets more volatile?

Speaker #8: Can you give a little more detail ? , on , on what they're able to do on a joint basis ? You know , I think the perception out there is that these are still two very separate geographic , , businesses .

Speaker #8: And then maybe , you drill in a little bit on the synergies . Originally , the expectation is that you could get some synergies in coffee procurement .

Speaker #8: And I wanted to know, in this very volatile environment, is it still possible to get those synergies, or are there any complexities that happen when coffee gets more volatile?

Speaker #1: Good . I think I'll start , , Anthony , on kind of the Keurig and Peet's combination benefits and then kick it over to you to talk more specifically on synergies .

Tim Cofer: Good. I think I'll start, Anthony, on kind of the Keurig and Peet's combination benefits. Then kick it over to you to talk more specifically on synergies.

Speaker #1: Sure . So , , we are already well underway in beginning to capture the benefits of bringing these two companies together . I'll let Anthony , as I said , talk more specifically on the cost synergies side , on the you know , if you will , revenue synergy side , , the biggest opportunity is here in the United States .

Anthony DiSilvestro: Sure.

Tim Cofer: We are already well underway in beginning to capture the benefits of bringing these two companies together. I'll let Anthony, as I said, talk more specifically on the cost synergy side. On the, if you will, revenue synergy side, the biggest opportunity is here in the United States. This is the geography where you've got the biggest overlap between legacy Keurig Green Mountain and legacy Peet's brand. The opportunities we've already got organizationally, we've moved to one team under one leadership team. We've actually transitioned Keurig and Peet's to a single invoice and an integrated sales force. That really will help us unlock these opportunities. We see opportunities for commercial investment, reinvesting some of the synergies that Anthony will talk to you about to fund high ROI marketing and promotions. We see coordinated programming opportunities for cross-portfolio marketing, promotions, variety packs. We see new formats.

Speaker #1: , this is the geography where you've got the biggest overlap between legacy Keurig Green Mountain and legacy Pete's brand and the opportunities we've already got a organizationally , we've moved to one team right under one leadership team .

Speaker #1: We've actually transitioned Keurig and Peet's to a single invoice and an integrated sales force . And that really will help us unlock these opportunities .

Speaker #1: We see opportunities for , , commercial investment , reinvesting some of the synergies that Anthony will talk to you about to fund high ROI marketing and promotions .

Speaker #1: We see coordinated programming opportunities for cross marketing promotions , variety packs . We see new formats . When you think about the Peet's legacy , Peet's business and the way that they participate across all formats and segments of coffee , there's opportunities for us to leverage that in our system .

Tim Cofer: When you think about the legacy Peet's business and the way that they participate across all formats and segments of coffee, there's opportunities for us to leverage that in our system. There's opportunities in cold coffee as you bring these two together. Then there's even opportunities to think about next generation brewer. We've talked about Keurig Alta, and we have announced now that as part of the Keurig Alta, when we first go to market with that here in the coming months, we will offer both Keurig and Peet's AltaRounds as the consumable. I can tell you our teams in Boston, legacy Keurig, and Emeryville, legacy Peet's, are already working together quite well. They're presenting joint plans to the customer. We think that can be an important unlock on the growth side. Do you want to talk costs?

Speaker #1: There's opportunities in cold coffee . As you bring these two together , and then there's even opportunities to think about next generation . Brewer .

Speaker #1: We've talked about Keurig , Ulta , and we have announced now that as part of the Keurig Alta , when we first go to market with that here in the coming months , we will offer both Keurig and Peet's .

Speaker #1: , ultra rounds as the consumable . So I can tell you , our teams in Boston Legacy , Keurig and Emeryville Legacy Peet's are already working together quite well .

Speaker #1: They're presenting joint plans to the customer , and we think that can be an important unlock on the growth side . to talk costs ?

Speaker #1: Sure . , to add to Tim's comment , we've remained very confident in the $400 million cost . You synergies program . You know , in fact , you know , the deal closed April 1st .

Anthony DiSilvestro: Sure. To add to Tim's comment, we've remained very confident in the $400 million cost synergies program. In fact, the deal closed 1 April, but we had teams across KDP, JDEP, and third-party consultants working on this well ahead of the acquisition close in terms of identifying and planning and assigning ownership for a number of work streams. That work has only accelerated since the deal closed. The financial contribution in Q2, fairly modest, but we certainly have line of sight to a building benefit in the H2 and certainly as we move beyond 2026. In terms of breaking down the $400 million, there are a number of areas, Rob. One area you mentioned was procurement, and I would say that we see a sizable opportunity in procurement even with the current coffee volatility, and I would say even more so given what's happening in the marketplace.

Speaker #1: But , you know , we had teams across KDP , Jdp and third party consultants working on this . Well ahead of the acquisition close in terms of identifying planning and assigning ownership for a number of , you know , work streams and that work is only accelerated .

Speaker #1: You know , since the deal closed , you know , the financial contribution in Q2 , fairly modest . But we certainly have a line of sight to a building benefit in the second half .

Speaker #1: And certainly , as we move beyond , you know , 2026 in terms of breaking down the 400 million number of areas Rob one area you mentioned was , you know , procurement .

Speaker #1: And I would say that , you know , we see a sizable opportunity in procurement , even with the current coffee volatility . And I would say even more so given what's happening in the marketplace .

Speaker #1: I T and S , G and A is another significant area in terms of simplifying that organization , rationalizing some of the , you know , applications and systems and eliminating duplication .

Anthony DiSilvestro: IT and SG&A is another significant area in terms of simplifying that organization, rationalizing some of the applications and systems, and eliminating duplications. On the manufacturing and logistics, Tim referenced integration in North America that, in fact, has already happened in terms of bringing the distribution of pods together. We're on a single invoice out of Keurig already. We're well underway and are confident in achieving the $400 million.

Speaker #1: And then on the manufacturing and logistics , you know , Tim referenced integration in North America that in fact , has already happened in terms of bringing the distribution of pods together .

Speaker #1: We're on a single invoice at Keurig already . So we're well underway . And are confident in achieving the $400 million .

Speaker #2: The last question today comes from Filippo Falorni with Citi . Please go ahead

Operator: The last question today comes from Filippo Falorni with Citi. Please go ahead.

Speaker #9: Can get a little bit more color on the energy drink Category in your expectations . There . You had a previous target of getting to double digit market share .

Filippo Falorni [Director: Can we get a little bit more color on the energy drink category and your expectations there. You had a previous target of getting to double-digit market share, maybe where you stand versus that target. Bigger picture, how are you thinking the growth in the category is impacting coffee? We've obviously seen a lot of younger consumers shifting their caffeine intake into energy drinks as a replacement for coffee. Maybe if you can talk about the interaction between those categories and your perspective there will be great. Thank you.

Filippo Falorni: Can we get a little bit more color on the energy drink category and your expectations there. You had a previous target of getting to double-digit market share, maybe where you stand versus that target. Bigger picture, how are you thinking the growth in the category is impacting coffee? We've obviously seen a lot of younger consumers shifting their caffeine intake into energy drinks as a replacement for coffee. Maybe if you can talk about the interaction between those categories and your perspective there will be great. Thank you.

Speaker #9: Maybe where you stand versus that target . And then bigger picture , how do you thinking the growth in the category is impacting coffee ?

Speaker #9: We've obviously seen a lot of younger consumers shifting their caffeine intake into , energy drinks that replacement for coffee . So maybe if you can talk about the interaction between those categories and your perspective , there would be great .

Speaker #9: Thank you Filippo .

Tim Cofer: Sure, Filippo. We're big believers in energy. This is a fantastic category, a large category, $30 billion, and one of the fastest-growing spaces in liquid refreshment beverage. I think there are multiple structural growth drivers that suggest that this growth won't end anytime soon. There are continued distribution point expansion opportunities. There's household penetration upside when you look at household penetration on energy relative to other LRB, more developed categories. There are occasions that have yet to be fully fleshed out. There are cohorts. Certainly, these days, the female consumer who has not only entered the category, but really a growing affinity and usage there. There's channel diversity yet to be fully exploited. Obviously, the category was born and raised in C-store, and it continues to feature prominently there. There's a lot of upside in other channels and opportunities across large format and others.

Speaker #1: So , you know , energy , we're big believers in energy . This is a this is a fantastic category . A large category .

Speaker #1: , you know , $30 billion . And one of the fastest growing spaces in liquid refreshment beverage . I think there are multiple structural growth drivers that suggest that this growth won't end anytime soon .

Speaker #1: There are continued distribution . , point expansion opportunities . There's household penetration upside . When you look at household penetration on energy relative to other LRB , more developed categories , there are occasions that have yet to be fully fleshed out .

Speaker #1: There are cohorts , certainly these days , the female consumer who is , , not only entered the category , but really a growing affinity and usage .

Speaker #1: There . And there's channel diversity yet to be fully exploited . Obviously , the category was born and raised in C-store , and it continues to feature prominently there .

Speaker #1: But there's a lot of upside in other channels . And opportunities across large format and others . So , , bullish on the category .

Tim Cofer: Bullish on the category. Our position, confident in our position. We like our portfolio. We've really curated this over the last many years. We're gaining market share. We've got real scale now. Right now, on a run rate basis, Filippo, we're looking at a $1.5 billion net revenue, net sales business. If you look at what's driving our performance, I think this portfolio with authentic and distinctly positioned brands, when you think about C4, Bloom, Ghost, Black Rifle, great-tasting products, great innovation, strong commercial programming, overlay the DSD capability that KDP brings to the party. Strong frontline execution, driving distribution, driving display activity. I think the other thing to point out is we focus on the most attractive part of the energy category, which is zero sugar. That's our whole portfolio, and zero sugar is the outside contributor to category growth.

Speaker #1: Then our position , confident in our position , we like our portfolio . We've really curated this over the last many years . We're gaining market share .

Speaker #1: We've got real scale now , right now on a run rate basis . Filippo , we're looking at a $1.5 billion net revenue , net sales , business .

Speaker #1: As you look at what's driving our performance , I think this , , this portfolio with authentic and distinctly positioned brands . When you think about C4 , bloom , ghost , , Black Rifle , great tasting products , great innovation , strong commercial programming , and then overlaid the DSD capability that KDP brings to the party .

Speaker #1: Strong front line execution , driving distribution , driving display activity . I think the other thing to point out is we focus on the on the most attractive part of the energy category , which is zero sugar .

Speaker #1: That's our whole portfolio . And zero sugar is the outside contributor to category growth . So really proud of what we've done . I would remind you that just about four years ago , we had less than a 1% market share .

Tim Cofer: Really proud of what we've done. I would remind you that just about four years ago, we had less than a 1% market share. As I mentioned in the prepared remarks here in Q2, we're a 9% share, just crossed the 9% share a few years later. That puts us well on our way to my goal of a double-digit market share. In fact, I would tell you in 15 major customers across the US, we've already crossed that double-digit threshold. The other part of your question was, are we seeing any sort of interaction between energy and coffee? What I'd tell you is we monitor that potential shifting behavior very closely, and we have not seen any sustained share movement between coffee and energy. Now, in any given year, the share shift from a, say, panel data standpoint, can lean one way or another.

Speaker #1: And as I mentioned in the prepared remarks here in Q2 , we're a 9% share just crossed the 9% share a few years later .

Speaker #1: , and that puts us well on our way to my goal of a double digit market share . And in fact , I would tell you in .

Speaker #1: 15 major customers across the U.S. , we've already crossed that double digit , , threshold . The other part of your question was , you know , are we seeing any sort of interaction between energy and coffee ?

Speaker #1: And what I'd tell you is we monitor that potential shifting behavior very closely , and we have not seen any sustained share movement between , coffee and energy .

Speaker #1: Now , in any given year , the share shift , you know , from a , say , a panel data standpoint can lean one way or another .

Speaker #1: But if you look at it over the last 3 to 4 years , I would tell you the impacts roughly neutral . There are some years where energy is a net gainer .

Tim Cofer: If you look at it over the last three to four years, I would tell you the impact's roughly neutral. There are some years where energy's a net gainer. There are other years where coffee's a net gainer. When you look at it in aggregate over the last many years, you see it broadly neutral. We continue to liken our current portfolio that we've got leading and winning solutions to serve that energy and alertness need that consumers have, whether that's through energy drinks or through coffee.

Speaker #1: There are other years where coffee's a net gainer . And when you look at it in aggregate , over the last many years , you see it broadly neutral .

Speaker #1: So , , you know , we continue to liken our current portfolio that we've got leading and winning solutions to serve that energy and alertness need that consumers have , whether that's through energy drinks or through coffee

Speaker #2: This concludes our question and answer session . I would like to turn the conference back over to Chethan Mallela for any closing remarks .

Operator: This concludes our question and answer session. I would like to turn the conference back over to Chethan Mallela for any closing remarks.

Speaker #1: Hi . Thank you for the , , the time .

Chethan Mallela: Hi. Thank you for the time and the attention this morning. I know it's a busy earnings day. The IR team is around if you have any follow-ups. Have a great day.

Speaker #10: And the attention this morning . I know it's a busy earnings day and the IR team is around . If you have any follow ups , have a great day

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Q2 2026 Keurig Dr Pepper Inc Earnings Call

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