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KDP expands national direct-store-delivery operations with Kalil Bottling Co acquisition
FoodBev Media

FoodBev Media

3 June 2024

KDP expands national direct-store-delivery operations with Kalil Bottling Co acquisition

Keurig Dr Pepper (KDP) has agreed to acquire production, sales and distribution assets from Kalil Bottling Co, marking the beverage giant's first company-owned operations in Arizona, US. The deal, set to close in Q3 2024, is expected to enhance KDP's direct-store-delivery (DSD) capabilities across a key growth market. The acquisition encompasses bottling and distribution rights for several KDP brands, including Canada Dry, 7UP, A&W, Snapple and Core Hydration. These operations will now serve 7.4 million consumers and approximately 4,500 retail outlets throughout Arizona. Upon completion, KDP will take over a production facility in Tucson and sales and distribution centres in Tucson and Tempe. This transition will add around 425 employees to KDP’s workforce, with efforts to recruit from Kalil’s existing staff. Strategic expansion in a growing market KDP CEO Tim Cofer said: "This exciting acquisition creates opportunities for enhanced scale and brand building in a fast-growing region for beverages. Amplifying our route to market advantage is a key investment priority for KDP, and this strategic move will extend our system's reach while providing us more direct insight into the local consumer base and stronger retail collaboration." John Kalil, president of Kalil Bottling Co, added: "The Kalil family has been in Arizona since before statehood, and Kalil Bottling Co has been around for 76 of those years. We thank Arizona for allowing us to serve you. We are transferring Kalil Bottling Co's business to Keurig Dr Pepper. When you pair the Kalil's Family legacy with KDP's national footprint, the future looks bright." Andrew Archambault, president of US refreshment beverages at KDP, underscored the strategic benefits of the acquisition. "Kalil has been an amazing independent bottling partner to KDP for decades, and we look forward to continuing Kalil's commitment to service excellence for our Arizona customers and consumers". He continued: "As we continue to optimise the best possible route to market throughout the US for our portfolio of leading brands, we are thrilled about adding the first KDP-owned manufacturing, sales and distribution operation in the state". Market impact and future prospects This acquisition is a significant move for KDP, which has been focusing on expanding its DSD network to better compete with rivals such as Coca-Cola and PepsiCo. The addition of Kalil's assets is expected to streamline operations, improve supply chain efficiency and enhance customer service in the Southwest US region. Analysts view this acquisition as a strategic play to bolster KDP's presence in a market that is seeing rapid growth in demand for premium and health-oriented beverages. With Kalil's well-established operations and local expertise, KDP is positioned to leverage these assets for deeper market penetration and improved brand visibility. The terms of the agreement were not disclosed, but the transaction is anticipated to close in the third quarter of 2024, subject to regulatory approvals and customary closing conditions. More about Kalil Bottling Co Kalil Bottling Co was established in 1948 by the Kalil family. The company has a deep-rooted presence in Arizona, with its founders having been in the state since before it achieved statehood. Kalil distributes a variety of beverages, including soft drinks, waters and energy drinks. The company has been a distributor for major brands such as Canada Dry, 7up, A&W, Snapple and Core Hydration, among others. With the acquisition by KDP, Kalil Bottling Co’s operations will be integrated into KDP’s national DSD network. This transition promises to bring enhanced capabilities and resources to the existing operations while also preserving the legacy and local expertise that Kalil has built over the past 76 years.

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