All right, welcome back, everybody. Thank you. I'm Steve Powers. I'm Deutsche Bank's head of the U.S. Consumer Staples Practice, and I'm thrilled to welcome for the first time ever, aside from a virtual appearance a couple years ago during the pandemic, Keurig Dr Pepper to the Consumer Conference. And with us today, our Chief Executive Officer, Tim Cofer, and Chief Financial Officer and the President of International, Sudhanshu Priyadarshi. Tim and Sudhanshu are gonna run us through a presentation, which should take the bulk of our time. To the extent we have some time at the end, I'll join them for some Q&A. But with that, I'm gonna turn it over to Tim to lead us through the presentation. Thank you so much.
Great. Thanks, Steve. Good afternoon, everybody. Great to be back in Paris, and great to be at the Deutsche Bank Global Consumer Conference. I've actually presented at this conference a number of times in my career, but as Steve said, the first time representing Keurig Dr Pepper. So great to be with you. We're excited to share with you today our vision for the next chapter of growth and value creation here at KDP. Got to do this. Let me first call your attention to the standard safe harbor regarding forward-looking statements and our use of non-GAAP measures. So with that out of the way, let's talk about KDP. At KDP, we have a simple but powerful vision: to provide consumers a beverage for every need, anytime, anywhere. And let's start with a video that brings that vision to life.
It's a fact, water is an essential part of life. That's why Keurig Dr Pepper offers people a liquid-fueled life full of possibilities. And with more than 125 iconic brands, the possibilities are almost limitless. From familiar favorites... to tomorrow's emerging brands. From morning... to noon... to night. We have all the beverages people want, allowing them to drink well every day. We satisfy every need, from morning walks to school runs, from connecting at lunch to unplugging at dinner, from sweet indulgences to zero sugar treats, from putting your feet up to letting your hair down, from cooling down after a workout to charging up for the big day ahead. But it's not just about having the best beverage brands, it's about having them within reach, wherever and whenever you need them.
We're one of the few national distribution networks delivering everywhere people shop, whether they're grabbing a cold drink for the road or stocking up for the big game. When a favorite coffee brand is needed at a moment's notice, our leading e-commerce site has all the flavors for making coffee shop favorites at the touch of a button, all deliverable to the 45 million households with Keurig brewers. And when dining out at restaurants, people all over the country enjoy America's most available fountain soda. Yep, we've got it covered. Every need, anytime, anywhere. And our secret ingredient to beverage leadership? Our people and our culture. We develop top beverage talent with a challenger mindset. We move with speed and flexibility. We're a passionate team that constantly challenges the status quo to do good. We're disruptors, innovators, collaborators, achievers. So together, let's quench our thirst for more.
Drink in every flavor. Drink in every moment. Drink in the possibilities.
All right, we think that captures the spirit of our company at KDP and our many sources of competitive advantage. As you may know, I joined this great young company just last year, and while I'm relatively new to KDP, I bring over 30 years of experience in the CPG industry, and I think that gives me both a fresh and experienced set of eyes. Here's what I see and what I think can be some of the key takeaways for you in our short session today. First, we're a pure play. We're a pure play in the most attractive part of CPG, the beverage industry. Within that, KDP is an advantaged platform. We're a challenger, but we bring a lot of scale and differentiated capabilities.
In our first five years post-merger, we've produced consistent, proven results, and we now have an evolved strategy to drive growth across each of our reported segments. Capital allocation is a core discipline for us. It has and will continue to be a critical element driving shareholder value. And most importantly, our goal is to deliver top-tier TSR, and our algorithm reflects that ambition. So many of you know us well. Maybe some in the room are relatively new to KDP. So here's the quick intro slide. We're uniquely positioned in North American beverage industry. On the one hand, we're a scaled business, $15 billion in sales, a wide portfolio spanning all beverage categories, and an advantaged set of capabilities. But on the other hand, we're a new, young company. We're a challenger at heart. We're a disruptor. We play offense, not defense. We're hungry, and we're ambitious....
Our overwhelming focus is on North American beverages. North American beverages is a huge TAM, $300 billion, and it shows steady growth characteristics. It's also very dynamic. There are shifting consumer preferences and continuous sources and pockets of growth, and that's why our dawn-to-dusk portfolio matters. It gives us exposure across all liquid refreshment beverage categories. We also have a track record of building new growth platforms, including in the last few years, recent entry into attractive, growth accretive spaces like premium water, like energy, and sports hydration. The other call-out on this slide is the increasing blur between alcohol and non-alcohol beverage alternatives. Here at KDP, we're building growing exposure into this other very large TAM. We operate across three publicly reported segments. Each segment is large, it's highly profitable, leading brands, and demonstrated growth. First, U.S. Refreshment Beverage.
This is a $9 billion market, segment, with a nearly 30% OI margin. Second, our U.S. Coffee business, $4 billion with a 33% OI margin. And finally, International, an often underappreciated part of our portfolio, now at $2 billion, has doubled since our merger a few years ago, with strong growth and solid OI margins. Our portfolio is a fantastic one. It is anchored by these iconic brands. In total, we have 125 owned, licensed, and partner brands. Four of those brands are north of $1 billion in retail sales: Dr Pepper, Keurig, Canada Dry, and Mott's. And our namesakes, you see on these two posters, near stage, Keurig and Dr Pepper, they're each north of $5 billion in retail sales.
We have another 10 brands that are north of $500 million, favorites like 7UP, A&W, Snapple, and our newest addition to the family, C4 Energy. In total, we have 30 brands north of $100 million. These brands are instantly recognizable with unwavering consumer passion. We have a new strategic framework. We debuted this framework at our March Investor Day. If you haven't had a chance to see our March Investor Day, highly encourage you to go onto our IR site and watch the replay. We'd characterize this strategy as an evolution, not a revolution. It builds on the successful first five-year foundation of this company, but importantly, it sharpens our focus in a number of key areas. At the core of the strategy are five pillars that inform our priorities and guide our activity from everyday executional excellence to the transformational.
Let me briefly click through each element of this new strategy. It starts with our purpose. We know why we exist. We know who we are. "Drink Well. Do Good." It started as a corporate responsibility rally cry, but it's now been elevated to our company purpose because it resonates so well internally with our colleagues, as well as with our external stakeholders. It provides a commitment to enhancing the experience of consumers' beverage occasions while driving a positive impact on our people, our communities, and our planet. This purpose informs our commitment across four key verticals: the environment, supply chain, people and communities, health and wellbeing. And in each case, we've developed and we're aggressively pursuing well-defined, and when appropriate, science-based goals and targets supported by a full cross-functional work stream. We're making great progress, and we'll continue to challenge ourselves to do more.
In fact, later this month, here in June, we will issue our latest corporate responsibility report, and I encourage you to take a look and note our progress against 16 very specific, publicly declared goals. Next to our vision, I said at the beginning, simple but powerful vision: delight consumers with a beverage every need, anytime, anywhere, from morning to noon to night. Whether at home or on the go, we have the beverage brands people love, and with our advantaged route to market, which I'll speak to in a minute, we can deliver on those needs wherever they shop. So with the clarity of the purpose and the vision as the overall umbrella, let's quickly touch base on the five strategic pillars. I've been a career brand builder for the last 30 years, and I can tell you probably what you already know.
In order to truly build, nurture, strengthen truly iconic brands, the consumer must be at the center, and accordingly, we are amping up our focus and our consumer orientation here at KDP. We're bringing deep proprietary consumer insights to surface unmet needs, inform how we position our brands, drive disruptive innovation, and ensure that we can set and deliver high ROI marketing investment behind these icons. Next strategy, we will continue to steer and shape our portfolio towards growth accretive spaces. Over the last few years, we've created multiple new platforms across many new segments, and, and doing so, we've done it in a way that embraces innovative structures. We don't have a one-size-fits-all model in terms of how we enter into new spaces. We're able to place multiple bets and do it in a very capitally, disciplined way.
In addition, as part of this strategy, you see a specific call-out on Accelerate International. We believe there's significant runway to grow KDP beyond the United States. Sudhanshu will talk more about the $2 billion International business and how it can be much bigger over time. So, no doubt that powerful brands are key to winning in beverages, but distribution strength is a major source of competitive advantage. Here at KDP, we have a true multi-system route to market, and one of those tremendous sources of advantage is our company-owned direct store delivery, or DSD. This gives us direct, everyday access to the shelf, to the consumer, through our customer. Importantly, we are one of only three nationally available coast-to-coast DSD systems in the United States. We will continue to invest in this asset and extend that advantage, growing our effectiveness and efficiency across the territories.
And no doubt, digital capabilities is a key part of that investment strategy to improve the effectiveness and efficiency, not only in DSD, but across the value chain. So our fourth strategy really then supports those first three growth-oriented drivers. It's all about cost and a source of fuel for the growth. We're entering a new chapter of cost opportunity at KDP. If you think about KDP, it was formed just about five, six years ago, and that first era was characterized by the merger, integration, synergy capture, and we did a great job. The next era, I would tell you, was overwhelmingly characterized by the COVID pandemic, and it was simply about surety of supply, keeping our employees safe, and making sure we can get bottles and cans out the door. We're now entering the next phase, and that phase will be characterized as continuous, robust net productivity.
We'll begin to harvest the benefits of some transformational investments we've made in our supply chain. We will pursue further network optimization, and we will keep a close eye on overheads. All of this will generate savings that then we can use to reinvest in our business and expand our margins. Finally, as I'm sure you all agree, the key to enhancing growth and TSR is smart, disciplined, and dynamic capital allocation. This has been a hallmark of KDP as a public company since our formation. We have a strong track record in cash generation and cash allocation, and you can fully expect that same focus and discipline as it regards capital allocation going forward. That's the strategy. That's the roadmap for the next few years, and it underpins our financial algorithm. That long-term algorithm, we believe, is competitive, is attractive, and importantly, today, remains unchanged.
Mid-single-digit net sales growth, high single digits EPS growth, and the optionality that comes from strong cash generation. Our goal is clear: deliver this consistently, deliver this predictively. All right, we've got the strategy as the foundation. Let's quickly click through our three reported segments, starting with U.S. Refreshment Beverage, $9 billion business that has delivered a very healthy 7% sales CAGR over the last five years. No doubt that pricing tailwind during COVID was a contributor to that 7% CAGR, but there are many other elements that have played an important role in that robust sales growth. Those include consistent market share gains, deliberate mix management, expansion into faster-growing categories, all on the back of a strengthened DSD system as a source of advantage. These will remain the hallmarks of our growth agenda in the next few years.
As I mentioned earlier, a healthy CPG business always starts with the consumer. And so as we dial up our consumer focus at KDP, we're leveraging a robust and proprietary consumer demand spaces knowledge estate. This is based on tens of thousands of in-depth consumer interviews. It allows us to deeply understand, identify, and literally map consumer occasions from morning to noon to night, whether they're at home or on the go, whether they're alone or with others. And those intersections form demand spaces, and those spaces then allow us to sharpen our brand positioning, improve our messaging, inform our innovation agenda, and drive impactful in-store, point-of-purchase, final moment of truth in market activation.
The slide you see here highlights two great examples of when we get this right, when we put together all of that consumer insight, that strong brand building and in-store activation on two of our iconic brands, Dr Pepper and Canada Dry. In both cases, you see strong, multi-year performance extending each brand's leadership position, and I can confidently project that in 2024, that will continue. As we think about our refreshment beverage portfolio, we continue to also pursue white spaces, white space opportunities to drive enhanced growth. As I mentioned earlier, we don't have a one-size-fits-all model. We can enter and expand into these categories in a patient, disciplined, and deliberate manner.
We take a look at each opportunity and think about buy, build, or partner, and then based on that approach, establish the best outcome, balancing speed, balancing control, and balancing, of course, capital discipline. The proof's in the results.... In these last few years, we have added all of the brands that you see on this page and entered into these three high-growth verticals: C4 and energy, premium water with CORE, Polar, Evian, Vita Coco, and Bai, and sports hydration with Electrolit. In each of them, we can benefit from the advantaged tailwind of that category growth and significant market share runway to go capture. Over these last few years, we've established ourselves, and we continue to work hard to position ourselves as a preferred partner with emerging brands and entrepreneurs in the beverage space, and we're continuously evaluating new opportunities to further enhance our portfolio.
As I mentioned earlier, route to market is absolutely critical to winning in beverages. DSD, direct store delivery, is a scarce asset, and it's a key investment priority for me and our team. I have run multiple DSD businesses in my past career, and I'm a big believer in the power of a well-run DSD system. As I mentioned, we're one of only three national DSD systems in the U.S., which means we can efficiently and effectively reach consumers from coast to coast, as you see here, covering 80% of the population. The greatest lever to DSD excellence and getting DSD economics right is scale. Scale begets scale. And as we add partners, like I showed you on the last slide, and as we build our own brands, that allows us to drive bigger drop sizes, higher store frequency, and improved overall DSD economics.
And then when we have that, that allows us to provide further investment into the system, more trucks, more drivers, more assets, and this drives the entire virtuous cycle of growth you see here on the right-hand side of the slide. To that end, just last Friday, you may have seen, we issued a press release, and we're quite excited to announce the latest example of our investment in DSD. We are extending our own KDP DSD system into Arizona. We're excited to take over the production, the sales, the distribution, and merchandising of our brands from a fantastic, multi-generational, independent partner in Kalil. We can extend our DSD system into this high-growth market, multicultural market, and really help support and hopefully amplify our Arizona marketplace momentum. I'm really thrilled with this latest addition and proof point of our investment in KDP DSD.
Let's shift now to the next segment, the $4 billion U.S. Coffee segment. This is a high-margin business, and it's grown at a respectable 2% net sales CAGR over the last five years, including some real choppiness during the COVID period. Importantly, we're well-positioned for the future in U.S. Coffee, and we're working to accelerate growth, and we've got good reasons to have confidence. First of all, coffee is a vibrant category in the United States. Over 2/3 of the U.S. population consumed a coffee in the last 24 hours. Aside from water, coffee is the single highest consumed beverage of any category in beverage.
Almost three-quarters of the coffee category volume is at home, and single-serve, which we're the pioneer and the preeminent leader in single-serve, market share of total coffee at home is now at 28%, up significantly from just a few years ago. So as we reinvigorate this category and get it back to growth, we see multiple growth drivers to tap. Certainly continuing to grow our penetration of single-serve at home, converting households from drip and large pot to single-serve, as we've done for years, and increasingly in a more difficult environment, sourcing coffee occasions from away from home, with breakthrough innovation and compelling value marketing.
So as a coffee leader in the United States, we take a total coffee approach, and it all starts, just like I showed you on refreshment beverage, with a very deep understanding of consumer behavior as it relates total coffee consumption, not just at-home single-serve, and we apply these insights to inform our growth agenda. What this shows, this slide shows is our 2024 innovation slate, and we have a loaded slate of innovation and news that I think can catalyze growth as we move into the back half. It starts with our largest push ever into cold coffee. Here's a fun fact on cold coffee if you didn't know it: In the United States, 70% of coffee shop beverages are sold cold or iced. That same figure at-home coffee, less than 20%. So we know there's a huge opportunity.
We know there's a consumer demand there. As the single-serve pioneer and the preeminent leader in U.S. Coffee, we have a responsibility and now a growth opportunity to satisfy that need. So we're pushing hard against that. We're launching an innovative new system called the K-Brew+Chill that will launch later this year. This will be our first system that brews a cold cup of coffee at the touch of a Keurig button. We'll couple that with bespoke pods, everything from iced coffee to proper cold brew coffee to a new line of refreshers that we've just launched recently and is off to a very strong start in terms of trial. In addition to that, we have a big expansion into artisanal, more premium, super premium coffees for the coffee connoisseur.
And this includes signing up great partner brands like Lavazza, that we announced most recently in our quarterly earnings call, La Colombe last year, Philz, a regional favorite. We're also bringing out a variety of coffee shop quality experiences, including innovative and high-growth things like oat milk lattes. And finally, I'm personally very excited about our partnership with La Colombe. That not only takes place in the pod form in terms of single serve, but also in this innovative ready-to-drink format. A true Draft Latte that is a unique experience, highly differentiated from the ready-to-drink coffee you may be drinking today, in my view. And also not only a great taste, a great texture, but fantastic from a calorie and a sugar standpoint.
A great new RTD coffee that will expand our total coffee footprint in the United States, and a great example of leveraging our DSD. So as single-serve coffee pioneers, Keurig has a well-defined value proposition, and our partners see that, and all coffee brands want to work with us. We're the industry steward, and yes, we have our own strong brands of our own. Green Mountain, The Original Donut Shop, these are brands we own. But in addition, we strategically partner to ensure consumers have a full assortment, a full choice of their favorite coffee brands. And as you can see on this slide, we've recently announced new partners. La Colombe, that I already mentioned, Lavazza, a very recent addition in the Black Rifle Coffee Company. And literally today, we're pleased to announce our latest addition to our coffee partnership portfolio, and that is Massimo Zanetti.
This is a fourth-generation coffee company with beloved brands, including Kauai Coffee and Chock full o'Nuts. I think you can see this win-win model with coffee partners is working and will continue. My last slide on coffee. I told you at the beginning, we have a challenger culture, and consistent with that challenger mindset, we never rest on our laurels. We're willing to disrupt even ourselves. Earlier this year, in March, we unveiled a revolutionary future vision for Keurig. It starts with K-Rounds. These are an entirely new consumable format that unlocks significantly enhanced product and sustainability attributes, and it will be coupled with our new Alta brewer. This brewer will create the full spectrum of coffee shop beverage experiences, including today's traditional long Americano coffee, refreshing cold coffee, and for the first time, high-pressure, proper espressos.
Importantly, all with a coffee pod, as you see on the left side, that is plastic-free and aluminum-free. We believe this system and these K-Rounds have the opportunity to redefine coffee at home for American consumers and the next generation, and we're excited to go into consumer beta testing later this year. So with that, let me turn it over to Sudhanshu, who will review our International segment, as well as our cost, capital, and financial outlook.
Thanks, Tim. It's great to be here today, and I see some familiar faces and some new ones. I appreciate, we appreciate all of your interest in KDP. I'll pick up where Tim left off, and I want to briefly discuss our International business. This is a great set of businesses which I have the privilege of leading. Given its outside growth potential, this is one of our key focus area for 2024 and beyond. Our International business has grown significantly over the last five years. It has doubled, as Tim mentioned. Today, this unit is comprised of two billion-dollar businesses, one in Latin America, mainly in Mexico, and second in Canada. In each of these business, we have a strong foundation of leading brand in attractive categories and backed by unique distribution assets.
In each market, we have meaningful runway for further growth across several dimensions, in terms of both market share gains and also category expansion. In addition, we also have scope for further geographic expansion. As we execute against these opportunities, we expect International to become an increasingly important third leg of KDP's story. Across Mexico and Canada, our momentum comes from participating in structurally growing categories and then driving broad-based market share gains. You can also see here there is a good overlap between our businesses abroad and in U.S. that Tim just discussed. This enables us to leverage enterprise-wide insights and best practices across borders. Let's now spotlight our progress in liquid refreshment beverages, or LRBs, to give you a closer-in example of the various growth drivers. We are seeing strong and broad-based brand momentum in Mexico LRBs.
By leveraging consumer insights work, we are identifying growth opportunities through multiple dimension. First, we are expanding our leading brands into adjacencies. For example, our powerhouse Peñafiel brand is growing into Adas and salt seltzer.... Second, we are lifting and sifting ideas from other markets. Two recent examples are Dr Pepper Strawberries & Cream, and Zero Sugar CSDs. Third, we are supporting this work with best-in-class marketing to build brand stature and differentiate it out to market, which I will go into detail a little later. As a result, our major brands are growing at the high end of the LRB category, and we have lots of runway across each growth driver, and we expect additional momentum. As in the U.S., we have promising emerging growth platform in International also. One notable example is RTD alcohol and alcohol alternatives.
These categories are fast-growing, and in Canada, we already have market-leading position in some key segments, namely low or no alcohol cocktails, non-alcoholic beer, and ready-to-drink Caesar. In each case, we are capitalizing on the blurring lines between alcohol and non-alcohol. We are also beginning to leverage the same insights and capabilities in Mexico. We just launched Schweppes Mocktail in Mexico. Over time, we can further rely on our learnings in International market and to build our presence in these emerging categories in U.S. also. Like in the U.S., distribution is a key growth driver in International beverage as well. In Mexico, we have a company-owned DSD system. Considering the prevalence of traditional trade outlet, DSD is especially relevant in this market, and we continue to invest behind it. This means expanding routes, investing in coolers, and broadening our brand presence in each outlet.
At the same time, we are also growing brand visibility and distribution in Canada. You must have seen our partnership with Toronto Blue Jays. It's an on-premise expansion in Canada. Putting this all together, we have already scaled in the International segment, but there is much more opportunity ahead. With strong and experienced local teams in Mexico and Canada, we are confident that this segment will continue to deliver outsized growth. Let's now switch gears. The segment discussion Tim and I just walked you through gives you a kind of color on how we're going to grow our revenue growth. The revenue growth algorithm, what we have, how will we drive that? Now, I will pivot to discuss two things: Our cost-saving focus on opportunity, which will help us translate the top-line growth to strong bottom-line growth while funding reinvestment.
And secondly, our dynamic capital allocation strategy to further support our algorithm and TSR. As Tim just referenced, KDP's evolution as a public company has had three productivity chapters. First one was synergy capture. Post our merger in 2019, we went to achieve $600 million in integration savings. Second, was during the pandemic, we modernized important aspects of our manufacturing network while prioritizing supply during COVID. And now we are firmly in the third chapter, continuous productivity, to provide fuel for growth. This agenda is underpinned by robust pipeline of projects across multiple cross-functional focus areas. That includes Design to Value, War on Waste. As we have shifted our focus to continuous productivity over the last 12 to 14... 12 to 24 months, we have delivered a step function increase in savings, starting with a near doubling of productivity in 2023.
Going forward, we are targeting 3%-4% of gross productivity run rate, with a goal to fund reinvestment across the business, offsetting inflation where possible, and ultimately, to power margin expansion. Overheads are another important focus area. We are currently middle of the pack relative to some of the key competitors. Our goal is responsibly reach the top tier over time. This takes time to culturally embed, but we are energized by the work. Beyond the benefit of P&L leverage, the work we are undertaking will also deliver one efficient and effective organization that will help us operate on an everyday basis. Shifting to cash, as Tim mentioned, a hallmark of our business is that it will continue to be a highly cash generative business.
As a result, making the right capital allocation decision is super critical. You heard Tim discuss this in an explicit pillar of our evolved strategy, reflecting its importance. We are highly disciplined about the capital allocation decision we make. Philosophically, we operate in a dynamic fashion based on where the best and smartest opportunity exist over time. Our top priority is internal investment. You get the best ROI there. The second, over time, we balance between inorganic growth and returning cash to shareholders. We have a well-established track record of executing against these priorities and ensuring a strong balance sheet, and that will continue in the future, too.
Bringing all these elements together, executing our strategy, will enable consistent delivery of our attractive financial algorithm, which is mid-single-digit top line growth, high single-digit EPS growth, and a strong free cash flow generation that gives us additional optionality. If you look at our results since merger, we have delivered at or above these targets thus far as a public company. We are committed to build on this track record. Going forward, we should translate into top-tier TSR. 2024 started off nicely with a strong set of Q1 results. At the same time, it is true that the macro and consumer environment remains somewhat choppy. Nonetheless, we remain confident in our full-year outlook, and we are reaffirming our guidance on our algorithm performance in 2024. Let me now turn it back to Tim for some closing comments.
Thanks, Sudhanshu. So two last slides, one last minute, and then if we have any time, Steve, happy to take questions. I wanna talk culture for a minute. I think culture is a critically important element of a company's success, and yet often it is the least externally visible element of a company. KDP has a unique identity in the beverage industry, and I can tell you, it's one of the many elements that attracted me to this company, and it's something I plan to specifically build upon. We will push ourselves to think differently, to move faster, to work smarter, while leveraging the significant scale and the capabilities we have in place. If you look at this slide, it has the four values. At KDP, these were created by our employees, for our employees. Look at these words, big, bold, fearless, team.
These speak to how we operate with one another. We are a challenger. We are a disruptor. We will play offense, not defense, and I like it that way. So to wrap it up, final slide. This brings together all the elements we've talked about over the last half hour or so. I think our strategic framework is very clear, and it will strengthen an already attractive position in the industry. We know it will produce a compelling set of outcomes, building on the strength of our first five years as a public company. These include strong base momentum, expansion into higher growth categories, meaningful International contribution, a robust productivity agenda to reinvest and to expand margins, and enhanced value creation through disciplined capital deployment. All of this, in turn, should translate into the attractive growth algorithm driving top-tier TSR for KDP and for our shareholders.
Less than a year in the role, I can tell you, we're well on our way. With that, I'll turn it back over to Steve.
Great. Thank you. I think we have time for one or two questions. We actually don't, but we're gonna push it.
Why not?
We're challengers, right?
We're challengers.
We're playing offense. So I guess maybe picking up on kind of the last couple of slides you just mentioned, Tim. As you say, seven months in the role, just any building on what you've already talked about today, any key observations or maybe surprises that you've had in those seven months, and any, as you say, there's a lot of folks in the room here who aren't as familiar with the story. Any things that are maybe less visible from the outside that you'd like to communicate as they assess Keurig Dr Pepper?
Yeah, you know, first of all, again, I can't underscore enough, I think the industry that we're playing in is a great one, and beverages is a great space to play. You know, the average American consumer drinks 90 oz of liquid each day. That doesn't change. That's pretty flat over time, but what they drink changes significantly over time. And what that means is, for a company who is truly attuned to consumer and who has the set of capabilities to then translate that into winning brands and winning route to market, there will always be pockets of robust growth. I like this platform at KDP, what Bob and the team have developed over the last many years, and I think we've got a lot of strengths to leverage.
I'd say the other thing, back to your comment on maybe less visible from the outside, is, you know, this is a moment. The first five years of this company delivered great results, I think a 6% CAGR on the top line and 11% EPS CAGR. There is. This is a bit of a moment. It's a refresh moment. There's been a CEO succession. There's an evolved strategy. Quite honestly, a refreshed leadership team. Sudhanshu's been with us 18 months. When you look at the top 10 or 12 folks, there's been a refresh there. So it's, it's a group of individuals that are really excited about the next chapter, proud of the last chapter, but excited about the next chapter and what we can do together.
I think what you've seen, I think the innovation we've put up, I think our commitment around investing in those winning capabilities, DSD, and our appetite to continue to shape this portfolio. We love our portfolio today, but we're not done, and we're gonna keep shaping this portfolio to make sure we take advantage of the growth opportunities in beverage.
Yeah. As you say, Keurig's a great example of that. One more, 'cause I'm still playing offense. You know, this whole... I mean, at the conference, leading into the conference, a lot of conversations as I've traveled around Europe, especially, a lot of questions on the U.S. consumer. You guys are. Although this is a great International business, you guys are also very well-
Yeah
... positioned to talk about the U.S. consumer. Some perspectives there, how you think that plays out in your categories, and how it influences your outlook on the year, and specifically, if you could, there's a lot of focus on the recovery of volumes-
Mm-hmm.
- set against a questionable U.S. consumer backdrop. So how you're thinking about that as it plays into your business?
Yeah. I mean, in a word, mixed. No doubt that we're seeing a consumer that's under a bit more pressure, say, over the last six, 12 months in particular. And, you know, taking a look at coffee, for example, we've done quite a bit of deep dive on understanding consumption down at different income levels. And very quickly, you know, we see some pressure in the low- and mid-income consumer.
The premium side, kind of the top third of the country from an income standpoint, our coffee business is actually flying, you know, with a strong growth. So it does. And on the refreshment beverage side, we're seeing some things like a little bit of channel shifting, looking for a little bit more-
... out of their dollar. Think club, think dollar, et cetera. Maybe a little compromise on instant consumption channel. You're also seeing a little bit more purchase, waiting for that holiday deal, a Memorial Day deal, July 4th deal on their favorite 12-pack of Dr Pepper, et cetera. But all that said, we do really pursue a barbell strategy, meaning there is an affordability angle and a value angle that we'll play. There's also a premium angle we'll play. The fact that we've got the breadth of portfolio that spans dawn to dusk, the fact that we call on every single channel, I think is pretty good. We like to think of ourselves as a, you know, recession-resistant model.
Importantly, I think the algorithm that we've committed to, including this year of mid-single digits and high single digits, very much assumes the economic conditions that we're in today.
Great. I have a million more questions. I'm sure there's a lot more questions in the room, but we are out of time. To be continued.