Beer Marketer's Insights - KDP Recruits Longtime Campbell Exec DiSilvestro as CFO as Priyadarshi Moves On; Keurig Now Means Coffee, Not Just Pods & Gizmos

Keurig Dr Pepper has recruited the 24-yr Campbell Soup vet Anthony DiSilvestro as its CFO, effective immediately, with view to putting his extensive cost-optimization and M&A experience to use in complex financial re-engineering scheme that will see KDP merge with JDE Peet's, then separate into beverage and coffee pure plays. DiSilvestro, who comes off 5-yr stint as Mattel's CFO, succeeds Sudanshu Priyadarshi, who once seemed headed to leading what's been dubbed Coffee Co but was dropped from that role during recent round of musical chairs associated with strategic transition (BBI, Oct 27). Sudanshu will stay on as an advisor thru Apr to help with transition. DeSilvestro will report to CEO Tim Cofer and lead KDP's finance and technology orgs. "He will play a crucial role in sustaining our company&#39;s strong base business momentum, while drawing on his significant M&A experience to facilitate the successful integration of JDE Peet&#39;s and ultimate creation of two winning companies," per statement from Cofer. For now, KDP is only saying that Cofer will stay with Bev Co as CEO after split, so it's not clear where DeSilvestro ultimately will segue to following the corporate split. As for Priyadarshi, he "has been an integral part of KDP&#39;s strategic evolution, accretive international contribution and strong financial performance during his tenure," Cofer said, wishing him well in his future endeavors. No explanation for why he's no longer part of the plan tho we'd speculated last month that it might simply be a matter of his lacking the star power that might excite investors in a new publicly traded entity. Priyadarshi also holds role of int'l prexy; moving forward, international biz unit leaders Gilberto Maldonado, svp/gm for Grupo Pe&ntilde;afiel and MSI, and Ryan Bahadur, interim prexy of KDP Canada, will report to Cofer.In related moves, KDP's svp commercial finance, George Lagoudakis, is taking newly created role of deputy CFO as co enters nitty-gritty phase of setting up the future Beverage Co. And co's IR and int'l finance chief Jane Gelfand expands her role to svp strategic finance & capital markets.Tho DiSilvestro had highly visible CFO roles at major NYSE-listed cos, it's worth noting he was at right hand of CEO Denise Morrison during Campbell Soup's greatest strategic misfire, effort by V8 juice marketer to intensify its presence in bevs via acquisition of Bolthouse Farms in 2012, back when the produce aisle seemed to be where the action was. Eventually realizing it had no competency in areas like carrot growing and refrigerated distribution, CPB ditched Bolthouse in Jun 2019 at a steep loss and pivoted instead to acquisition of shelf-stable snack co Snyder's Lance. By then Morrison had abruptly retired, and DiSilvestro left Campbell that Dec, joining Mattel 6 mos later. Campbell Soup has since rebranded itself as Campbell Co now that its core soups no longer play central role in overall biz and has kept its bev presence to V8, mainly on warm shelves. Tho that was disappointing conclusion to strong career at CPB, things went better at Mattel, where DiSilvestro "modernized and elevated the finance organization, fortified the company&#39;s balance sheet and credit profile, and drove strong cost discipline and productivity across the enterprise," per announcement.Keurig Now Means Coffee, Not Just Pods & Gizmos Keurig is one of most familiar names in coffee in N Amer but it's never actually been a coffee brand. KDP just moved to remedy that omission, today announcing launch of premium pods called Keurig Coffee Collective. "That&#39;s right, the brand you thought already made coffee is helping to uncomplicate your morning routine even more with its very own branded coffee line," per announcement. Breaking on Keurig.com DTC platform first but heading to retail early next yr, KDP is romancing new line by touting its Refined Grind process that ups the density to deliver 30% more grounds in each pod, among other high-toned features. Inaugural 5 offerings, each attributed to a different cited expert within Keurig's ranks, attempt to romance product with names like Bold Beats Medium-Dark Roast by Master Roaster Eric Taylor and Warm Hug Caramel Spice by Sensory Scientist Moira Kelley. An 8-count box goes for $9.99 to one-time purchasers. As far as we can recall, Keurig execs have never stated why they never employed the name, tho it's possible they feared backlash from licensed partners. During long years when KDP was groping for effective RTD coffee strategy, some outside co suggested using Keurig-platform names like Keurig, Green Mountain or Original Donut Shop tho ultimately co seems to have found effective way forward via partnership with La Colombe.KDP Shares Still Way Down but Debt That's Spooked Investors Should Moderate Soon, S&P Believes Recall that market reacted negatively to strategic plan, with some investors viewing it as much driven by JAB Holdings' desire to liquidate its JDE Peet's stake as by any real value-creation imperative given the leverage merged co would be burdened with. So shares plummeted as much as 25% before KDP rejiggered deal by bringing in Apollo and KKR to knock down leverage to more manageable levels. That prompted modest rally in shares that proved to be brief, with shares now trading around $27 vs mid-$30s at time twin transactions were announced.How do Wall Street watchers assess strategy these days? Ratings firm S&P put it on its CreditWatch list with negative implications for JDE deal's likelihood of elevating leverage to well over 5X after it had already moved to 4X with Ghost acquisition. But S&P figures KDP's continued strong fundamentals should see it decline soon enough. "The combined entity should materially strengthen credit metrics, including S&P Global Ratings-adjusted leverage no higher than 4.5X about 24 months after closing, with a clear trajectory toward 4X shortly thereafter," it wrote. "This primarily reflects the good performance of KDP's core carbonated soft drinks business, the growth potential of its emerging brands and the operating efficiencies derived from increased direct store distribution and growing volumes - including with partner brands."

KDP Recruits Longtime Campbell Exec DiSilvestro as CFO as Priyadarshi Moves On; Keurig Now Means Coffee, Not Just Pods & Gizmos

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