Keurig Dr Pepper (KDP) has agreed terms to acquire energy drink and sports nutrition business GHOST, bringing one of the category’s fastest growing brands into its expanding energy portfolio.
KDP is paying $990 million for an initial 60% stake in GHOST – representing supplement arm GHOST Lifestyle and its drink business, GHOST Beverages – with the remaining 40% to be acquired in 2028. The deal is expected to close in late 2024 or early 2025.
“GHOST is a differentiated brand with significant growth potential, and we are excited to partner with its founders to take the business to the next level,” said KDP CEO Tim Cofer in a press release. “This acquisition strengthens our position in the attractive energy drink category, accelerating our portfolio evolution toward consumer-preferred, growth-accretive spaces through a disciplined deal structure.”
“The energy category is poised for continued long-term growth, which KDP expects to increasingly capture through our platform-based approach,” he added. “KDP’s portfolio of complementary energy brands is aligned against distinctive consumer need states, and, together, these offerings will unlock significant growth and scale benefits across our entire DSD portfolio.”
Co-founders Dan Lourenco and Ryan Hughes are staying on with GHOST and will operate as part of KDP’s U.S. Refreshment Beverages segment.
“We could not be more excited to build the future of GHOST together with KDP. As we thought about our company’s next chapter, KDP’s track record of cultivating disruptive brands, similar challenger mindset, and shared vision for the energy category and beyond made it the right home for our brand and team,” said Lourenco. “We are excited to pair KDP’s insights and capabilities with our products and people and know that together we will continue to scale and build GHOST towards our vision of a 100 year brand.”
Quick Take: While GHOST’s acquisition isn’t a total surprise to industry watchers, Keurig Dr Pepper as the buyer is.
For starters, KDP’s acquisition means the end of GHOST’s relationship with Anheuser-Busch InBev (A-B), a minority investor and the brand’s energy drink distribution partner since 2018. According to the release, KDP plans to invest “up to $250 million” in buyouts to transition GHOST on to its own network of trucks. That means – once again – beer distributors nationwide will have a gap to fill in their portfolios, creating potential opportunities for another set of young brands to take advantage.
When reached for comment this morning, an A-B spokesperson stated: “We were recently informed that GHOST has reached an agreement to sell all of its businesses to Keurig Dr Pepper (KDP); we will work with KDP throughout this transition while continuing to focus on driving growth with our portfolio of industry-leading brands.”
And yes, obviously, this underscores KDP’s ambition to grow strategically in key categories like energy. It’s unclear what this means for Nutrabolt, makers of C4 Energy, one of GHOST’s closest competitors amongst a cohort of surging next-gen energy brands. KDP made headlines by taking a minority stake in Nutrabolt (30% for around $868 million) and bringing C4 on to its trucks in 2022. On the strength of agreements with popular IP licensed from Hershey’s and other candy brands, C4 has emerged as the fourth best-selling brand in the category behind Red Bull, Monster and Celsius: in the 52 weeks through Sept. 6, the brand has grown 44.5% (around $738 million in sales) in total U.S. MULO plus convenience, according to NielsenIQ. KDP’s ability to keep the brand growing through its network should give confidence that it can do the same with GHOST, which generated around $632 million in sales during the same period.
Jefferies analyst Kaumil Gajrawala pegged the transaction at about three times Ghost’s 2024 sales. The acquisition and other distribution agreements would give the soft drink giant about 6% share of the overall energy drink market.
That’s not all, either: GHOST’s acquisition also comes ahead of another energy drink debut – this one from Black Rifle Coffee Company, as previewed at NACS earlier this month – which will be going on KDP trucks starting in January 2025. Those arrive as another energy play, A Shoc, is being phased out.
While the details remain to be sorted, one thing is clear: KDP’s commitment to growth via M&A and strategic investments remains strong as ever.
This is a developing story. Stay tuned for more details.