USA: Secretive German Reimann family buys Dr. Pepper/Snapple

The secretive German Reimann family is buying Dr Pepper Snapple (DPS), an American soft drink company with iconic brands like Dr. Pepper, 7UP, Snapple and Bai for $18.7 billion (€15.1 billion.) The soda company will be merged with Keurig Green Mountain, a US based specialty coffee and coffeemaker company founded in 1981. The new company, which will be called Keurig Dr Pepper, combines sales of about $11 billion and will be controlled by JAB Holding Company, a company majority owned by the Reimann family. The Dr Pepper Snapple shareholders will still hold 13 percent in the merged company with another 13-14 percent owned by Mondelez International, maker of Oreo cookies and Dentyne gum.

Robert (Bob) Gamgort, chief executive of Keurig, will become CEO of the merged firm and Ozan Dokmecioglu, CFO of Dr Pepper, will become the new CFO. Bart Becht, chairman of JAB Holding, will become chairman Keurig Dr Pepper.

The transaction is planned to close in the second calendar quarter of 2018. Thereafter Keurig Dr Pepper will be a publicly traded company, with JAB Holding Company as its controlling shareholder.

The purchase of DPS will give Keurig Green mountain a stronger foothold in the fast growing cold-brew coffee market, in which coffee is brewed in room-temperature water, rather than heated water. The cold brew process results in a naturally sweeter coffee with higher levels of caffeine and lower acidity. High Brew, one of the leading brands in this segment, struck a distribution agreement with DPS in 2016 and could significantly expand the brand’s availability in key markets. It is most likely that the Reimann family wants to replicate this success with its own brands.

On the other hand, DPS can use the expertise of Keurig Green Mountain, which dominates the pod coffee market, to sell soft drink pods for Dr Pepper and 7Up, allowing the consumer to make their drinks at home without buying cans or bottles of soda.

Maker behind the deal is the German Reimann family, namely four of the late Albert Reimann Jr.'s nine adopted children. They are descendants of chemist Ludwig Reimann, who started his fortune in 1828 with chemical and consumer goods company Benckiser. After decades and centuries of growth, Benckiser merged in 1999 with UK-based Reckitt & Colman to become Reckitt Benckiser Group, in which the Reimann family nowadays holds a minority interest through its JAB Holdings.

Another line of business of the Reimann family is cosmetics.  In 1992 Benckiser Consumer Products, the U.S. arm of JAB Holding Company, bought beauty products manufacturer and fragrance company Coty from pharmaceutical company Pfizer.

Coty became the largest player in this markets over the years by incorporating many other beauty companies including Quintessence (1993), Lancaster Group (1996), Unilever Cosmetics International (2005), DLI Holding Corp. (2007), Philosophy (2010), Dr. Scheller Cosmetics (2011), OPI Products (2011), TJoy (2011), Procter & Gamble's beauty brands (2015), digital marketing platform Beamly (2015), Hypermarcas’ Beauty & Personal Care Business (2015), merger with P&G Specialty Beauty Business (2016) and Good Hair Day (2016).

As further growth in the two aforementioned market segments is limited, the Reimann family has started recently to diversify their JAB Holding into two totally new market segments, namely infusion drinks (tea and coffee) and bakery products (donut and bread).

In July 2012 JAB acquired Peet’s Coffee and Tea. Six months later, the company bought the Minnesota chain Caribou Coffee. In 2013 JAB purchased D.E Master Blenders 1753 (with brands Douwe Egberts, Senseo, L'OR, Pilao) for $9.8 billion, which merged in May 2014 with the coffee division of American food conglomerate Mondelez International (with brands Jacobs , Tassimo, Carte Noire, Gevalia, Kenco,Millicano).

In 2014 the group bought Mighty Leaf Tea and in 2014 Peet’s acquired both Portland-based Stumptown and Chicago’s Intelligentsia third-wave coffee shops in 2015. Then in 2016, JAB made its biggest deal with the $13.9 billion cash acquisition of Keurig Green Mountain.

At the same time JAB and its subsidiarires also bought several bagel and bread companies including Einstein Brothers Bagel (2014), Krispy Kreme (2016), Panera Bread (2017), Au Bon Pain (2017), and Bruegger’s Bagels (2017).

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