Keurig Dr Pepper CEO Tim Cofer built a challenger portfolio — Dr Pepper passed Pepsi

Keurig Dr Pepper was itself an experiment: the mid-2018, $18.7 billion merger of Dr Pepper Snapple and Keurig Green Mountain created the only big beverage maker spanning both hot and cold drinks, with more than 125 brands. But by 2022 the coffee half had flattened — rising bean costs pushed up K-Cup prices and drinkers deflected to instant — while flagship Dr Pepper sat a distant third in North America. Tim Cofer, a Kraft and Mondelez turnaround executive who had never worked in beverages, joined as COO in November 2023 and became CEO in April 2024.

At the 29,000-employee company Cofer installed what he calls a challenger culture — 'we play offense, not defense' — and began adding fast-growing, high-margin categories: energy, sports hydration, refreshers and ready-to-drink iced coffees. In October 2024 KDP struck a $1.65 billion deal for Ghost, the energy brand founded by a 38-year-old entrepreneur. The move replayed a playbook Cofer had run at Mondelez, where his SnackFutures venture group backed young brands and he replaced questionnaires and focus groups with pop-up taste tests at schools and farmers' markets.

The flagship got the same treatment, with marketing tuned for Gen Y and Gen Z such as the 'Fansville' campaign. Per Fortune's June 2025 profile, classic Dr Pepper had raced from distant third to pass regular Pepsi as the second-bestselling soft drink in North America behind Coke. Analysts still called coffee the company's 'problem child,' leaving Cofer the dual task of high-margin hits on the soda side while reheating Keurig.

Classic Dr Pepper passed regular Pepsi as the second-bestselling soft drink in North America behind Coke; Ghost energy acquired for $1.65B

Coffee, half the 2018 merger's logic, had flattened since 2022 as bean costs raised K-Cup prices, so growth had to come from cold beverages.

Energy was the fastest-growing, high-margin shelf where a challenger could buy in rather than build.

Cofer's Mondelez venture group SnackFutures had already proven the model of backing young brands, making the Ghost purchase repeatable.

Dr Pepper's rise showed Gen Y and Z consumers responded to a former #3 brand marketed with challenger swagger, validating the culture shift.

A scaled incumbent can borrow challenger tactics: buy the fast-growing brand instead of copying it, and market the flagship to the generation actually buying soda.

As of Fortune's June 2025 profile, the $1.65 billion Ghost deal — agreed in October 2024 — had made KDP what the magazine calls the industry's most aggressive, creative player, and Dr Pepper's #2 spot behind Coke held. The unresolved task was coffee: higher K-Cup prices had pushed drinkers toward instant, and Cofer still needed to lift KDP toward Coca-Cola- and PepsiCo-level profitability while reheating the Keurig half of the 2018 merger.