The History of Keurig Dr Pepper: A Stock Based Perspective
Green mountain coffee roasters, an organization founded by an entrepreneur Bob Stiller near Waterbury, Vermont. It was founded because Bob had an amazing cup of coffee close to a ski resort in Vermont which was so good that he went after the source and located it in Waitsfield, Vermont. Along with a colleague, he quickly bought 2/3 stakes in that company around 1981. Using only Arabica coffee beans, Stiller decided to do this for a living. by 1982, Bob moved the operation to Waterbury, Vermont with around 30 employees.
Two years later, Bob Stiller became the sole proprietor of the company by buying off the company from his partners at a price of 100,000 USD. He named the company Green Mountain Coffee and Roasters (GMRC).
It took 4 years to turn a profit, in the while, Bob sold to all platforms; gas-stations and high-end restaurants alike. He even gave away free samples as he couldn’t afford advertisement. But with time, the business grew and by 1991, GMRC had multiple retail outlets and over one thousand wholesale clients. The company made sales of 11 million USD and a profit of 200,000 USD. By 1993, GMCR had more than 2400 wholesale accounts with sales that estimated over 10 million USD. This is when GMRC started trading Publically under the ticker of ‘GMRC’ while expanding its operations and business.
It was in the late ’90s that the company expanded its national distribution circle to encompass a number of supermarkets and chain-store and started exporting to Taiwan and Canada by 1994. Around 1993, three entrepreneur engineers approached GMCR with a start-up they called Keurig. The project was about making a single-cup system for coffee brewing. Not only Green Mountain invested, but by 1996, they had 35% interest in the company.
By 1997, GMCR made a deal with Poland Spring that laid the path to in-office market in the North-East, extending their reach to thousands of offices, thanks to personal brewing system developed by Keurig for offices. The launch of K-cup allowed GMCR to compete with Starbucks. 1998 was particularly big for GMCR as they expanded their supermarket distribution to over 500 stores, stroked an exclusive deal with American Skiing Company, sold their ‘certified’ organic-coffee in Exxon Mobile’s national/international ‘On The Run’ convenience stores, offered their first gift catalogue, while on the very next year they also exporting to England.
GMCR kept increasing its percentage ownership of Keurig successively in the years 1993, 1996, and 2003. By 2006, Green Mountain had fully acquired the single-cup brewing system manufacturer and obtained a multi-brand portfolio. By 2014, Green Mountain was deriving 95% of its revenue (over 4.3 Billion USD) from high margin sales of K-Cups. The company stock skyrocketed to an all-time high on 28th September 2010, but after the Security and Exchange commission inquired about how Green Mountain Accounted for its revenue, the company disclosed. The probation was lifted in 2014 and no enforcement was brought against the company or its employees as most analysts declared the practices (including revenue recognition) of the company to be sound.
In March 2014, the shareholders at GMRC voted for changing the company’s name as ‘Keurig Green Mountain’ in order to highlight their business of selling coffee makers of Keurig. The same year, Coca-Cola purchase 10% shares, valued at 1.25 Billion USD and raised it to 16% for the development of a home-based system that allowed consumers to make soft drinks at home. A deal similar to previous one was made with the Dr Pepper Snapple Group but without any stakes as stockholders.
In December of 2015 a private equity firm named JAB Holding Company, announced its interest in acquiring (then) Keurig Green Mountain for a sum of 13.9 billion USD. The decision to sell the company was unanimously approved by the board of directors of the company. The closing price of shares (for selling) was at 92 USD per share with an estimated 78% premium over the closing price. Coca-Cola with 17.4% shares of GMCR announced its continued support for JAB in regards to earning a considerable financial benefit. The attainment was finished by march 2016 and Keurig Green Mountain turned into a privately held company while remaining self-governing, run by its original administration.
Dr Pepper Snapple Group, which was formerly a part of Cadbury Schweppes Americas Beverages which was spun off from it and became a separate entity called Dr Pepper Snapple Group. It started trading its shares on the NYSE as DPS on May 7th 2008. Dr Pepper was purchased by Cadbury Schweppes in 2006 and 2007.
Dr Pepper Snapper Group was acquired by Keurig Green Mountain in 2018 in a deal worth at 18.8 billion USD. The company again altered its name to Keurig Dr Pepper and became the third-largest North-American beverage company. In July of 2018, the shares of Keurig Dr Pepper started trading on the NYSE.
From Green Mountain Coffee Roaster (1981-2014) to Keurig Green Mountain (1981-2014) to Keurig Dr Pepper (currently) is now a publicly traded American conglomerate beverage-maker that makes and sells a variety of beverages which includes a variety coffee under different brand names, a variety of teas, soft drinks, juices, and sodas via its various divisions. The company also sold a variety of brewing systems for coffee and beverages (cold drinks). The east coast of the company sells over 400 different kinds/types of beverages and coffees under different brand names.
What was once a publicly traded company from 1993 to 2015, that started as a small speciality coffee roaster shop in 1981, Vermont by an entrepreneur, became a multi-billion-dollar conglomerate empire. It was a privately held company for two years and was an independently run organization by its pre-existing management and a new CEO. The original founder of GMCR Bob Stiller remained the president and CEO from 1981 to 2007. He stepped down then but remained chairman by 2012. The business operates in two segments, domestic, which produces and sells coffee and other hot or cold beverages to be prepared.
The Canada based unit the Keurig brewers and a variety of beverages. All shares traded under the tag of KDP.
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