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Keurig Dr Pepper (KDP) Agrees to Acquire Kalil Bottling Assets

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Keurig Dr Pepper Inc. (KDP - Free Report) appears encouraging, thanks to its robust business strategies. The company has been gaining from expansion initiatives, innovation, brand strength and pricing actions. In the latest development, it has agreed to acquire the entire production, sales and distribution assets of independent bottler Kalil Bottling Co. (Kalil).

Let’s Delve Deeper

The acquisition is likely to conclude in the third quarter of 2024. However, the terms of the agreement have been kept under cover. This acquisition will encompass bottling and distribution rights in Arizona for major KDP brands, including Canada Dry, 7UP, A&W, Snapple and Core Hydration. This will service 7.4 million consumers and about 4,500 retail outlets.

After the completion of the transaction, Keurig Dr Pepper will operate a production facility in Tucson, and sales and distribution centers in Tucson and Tempe. The company anticipates adding nearly 425 employees to support the new state-wide operations apart from working with Kalil to actively recruit from the existing talent base.

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Markedly, the acquisition will reinforce the company’s unique national direct-store-delivery capabilities and offer opportunities for advanced scale and brand building in a fast-growing region for beverages.

What’s More?

Continued brand strength and significant pricing have been aiding Keurig Dr Pepper’s performance for a while now. The company has also been experiencing momentum in the Refreshment Beverages segment. In the first quarter, sales in the U.S. Refreshment Beverages segment totaled $2.1 billion, up 4.3% year over year, reflecting a higher net price realization of 5.6%.

In addition, management highlighted an evolving enterprise strategy, which focuses on five pillars to deliver sustainable growth. These comprise a road map to guide the company’s employees' actions every day with directives to champion consumer-obsessed brand building, shape its now and next beverage portfolio, amplify the route-to-market advantage, produce fuel for growth and dynamically allocate capital.

Buoyed by such strengths, shares of this energy drinks and alternative beverages’ marketer have gained 12.4% versus the industry’s 1.6% rise over the past year. The company carries a Zacks Rank #3 (Hold).

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