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Diving overview:
- Keurig Dr Pepper said in a statement that it is acquiring energy drink maker Ghost for more than $1 billion.
- The beverage giant plans to initially spend $990 million to acquire a 60% stake in Ghost. In 2028 Keurig The remainder of the business will be acquired by Dr Pepper.
- This acquisition further strengthens Keurig Dr Pepper’s position in the fast-growing energy drinks category and improves its ability to reach new consumers throughout the day. It has previously invested in other energy brands and owns Venom Energy.
Dive Insights:
The $19 billion energy drinks sector has been a popular source of M&A activity in recent years. Monster Beverage acquired Bang in 2023 after bankruptcy, while PepsiCo bought a stake in Chelsea and acquired Rockstar for nearly $4 billion.
Keurig Dr Pepper has dabbled in this space before, buying a 30% stake in Nutrabolt, maker of energy drinks such as C4 Energy and Xtend Energy, in 2022 for $863 million and investing in A Shoc earlier the same year. Also in September, it signed a deal to sell and distribute Black Rifle Coffee’s new line of ready-to-drink energy drinks.
Despite these associations with other products, Keurig Dr Pepper may have been fascinated by Ghost’s growth, leading it to pursue an acquisition. Over the past three years, the brand’s net sales have more than quadrupled, Keurig Dr. Pepper pointed out. Founded in 2016, Ghost is also one of the fastest growing brands in the energy sector with its unique identity, unique flavors and packaging.
“GHOST is a differentiated brand with significant growth potential,” said Tim Cofer. Keurig Dr Pepper’s CEO said in a statement: “This acquisition strengthens our position in the attractive energy drinks segment and accelerates the evolution of our portfolio into a consumer-preferred and growth-promoting space through a disciplined deal structure.”
He added that the beverage maker’s portfolio of energy brands is “tailored to special consumer needs, and together these products will deliver significant growth and expansion benefits across the entire (direct store delivery) portfolio.”
In addition to energy drinks, Ghost also manufactures protein and supplement powders and has collaborated with General Mills on high-protein cereals.
Keurig Dr Pepper also said it expects to invest up to $250 million starting in mid-2025 to transform Ghost’s existing distribution agreement before selling and distributing the brand through its own delivery network.
While neat Dr Pepper is best known for its eponymous signature beverage, and has rapidly grown its beverage portfolio through acquisitions and acquiring stakes in smaller companies.
It currently owns brands such as Bai, Core, Snapple, 7Up, Crush, Nantucket Nectars, and Yu-Hoo. It also invested in coffee maker La Colombe and non-alcoholic beer maker Athletic Brewing. Keurig Dr Pepper’s portfolio has evolved to offer the opportunity to sell to consumers across more occasions, from coffee, water and juice to soda, tea, non-alcoholic beverages and mixers.
With the energy drinks market dominated by Red Bull, Monster, and Celsius, and the presence of numerous other brands. Keurig Dr Pepper’s marketing and distribution capabilities will increase Ghost’s chances of success in an increasingly competitive market. Ghost stands out with its unique flavors, including Electric Limeade, Sour Patch Blue Raspberry, and WarHeads Sour Green Apple.
“As we think about the next chapter for our company, KDP’s track record of fostering disruptive brands, a similar challenger mentality, and a shared vision for the energy category and beyond make KDP the right home for our brand and team.” said Dan Lourenco, co-founder of Ghost. And the CEO said: “We are excited to combine KDP’s insights and capabilities with our products and people, and know we will continue to expand and build GHOST toward our vision of a 100-year brand.”
