Corporate Responsibility Report 2018
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Corporate Responsibility Report 2018
Drink Well. Do Good.
What’s Inside About This Report
About This Report 1 This is the first corporate
responsibility (CR) report for
A Message from Our Chairman & CEO 2
Keurig Dr Pepper (KDP), formed
Keurig Dr Pepper: by the 2018 merger of Keurig Green
Our Unique Approach 3 Mountain and Dr Pepper Snapple
Group. As separate companies,
A Message from
Keurig Green Mountain published
Our Chief Sustainability Officer 5
annual reports detailing social and
The Environment: environmental progress since 2005
Refreshingly Responsible 7 and Dr Pepper Snapple Group
published reports since 2010.
Supply Chain:
Good from the Start 17
Unless otherwise noted, this report covers
data and activities for calendar year 2018 from
Health and Wellbeing: Keurig Dr Pepper’s wholly owned operations,
Better Choices, Better Lives 21 which are located in the U.S., Canada and
Mexico. The content covers the parts of our
business over which we have operational
Communities: Responsible control and does not include joint ventures,
Citizens, Good Neighbors 23 franchised or outsourced operations, except
where noted. Selected data and information
on our global supply chain activities are also
included. All data is as of December 31, 2018,
unless otherwise indicated.
We developed this report in accordance with
Global Reporting Initiative (GRI) Standards
Core option. To view our GRI Index, please visit:
www.keurigdrpepper.com/CR.
Corporate Responsibility Report 2018 1
A Message from Our Chairman and CEO
The vision behind the
creation of Keurig Dr Pepper,
the first company to offer
hot and cold beverages at
scale in North America, was
rooted in a bold new way
of looking at the beverage
business. We saw that
consumers today have more
choices than ever for what
to drink and where to shop.
They also have greater
expectations for variety,
quality and convenience,
as well as for transparency
and positive social and
environmental impact.
Our portfolio of beverage brands While our progress on previously circular material use, including
has the ability to satisfy nearly every committed objectives remains on recyclability and recoverability;
consumer need throughout the day, track, we’ve set ambitious new goals reducing our environmental footprint
and our distribution capabilities allow to ensure we are making a positive in energy, water and waste; and
us to deliver to virtually every point of impact every day. This includes building stronger communities.
purchase throughout North America. expanding responsible sourcing
practices across our supply chain; But we’re just getting started.
As a new challenger in the industry, designing packaging to enhance We know we have additional
we also wanted to focus outward opportunity to continue to examine
on redefining how our business could our ambitions and commitments,
be a catalyst for positive change while building new collaborative
for our consumers, employees, partnerships to be a force for
suppliers, partners, communities change within our industry.
and the planet. That meant looking While our progress on
holistically across our value chain – Together with our passionate
from source to consumption – with
important historical employees, suppliers and partners,
an honest objective in assessing company objectives we are determined to create long-
where we’ve demonstrated good
sustainability practices and where
remains on track, we’ve term value for our stakeholders and
a more resilient future for the world.
we could do better. That also led to a set ambitious new goals
prioritization of the initiatives where for the business to
we can drive the most value as KDP.
ensure we are leveraging
our leadership to make
a positive impact with Bob Gamgort
Chairman & Chief Executive Officer
every drink.
Corporate Responsibility Report 2018 2
Keurig Dr Pepper: Our Unique Approach
Our corporate responsibility commitments
are aimed at ensuring our beverages make
a positive impact with every drink.
We are channeling the significant energy and
resources of our organization to those opportunities
where we believe we can have the greatest impact.
In 2018, Keurig Dr Pepper – the hot and cold beverage brands includes partnerships across our business.
first company to offer hot and cold Keurig®, Dr Pepper®, Green Mountain We also embrace this partnership
beverages at scale in North America Coffee Roasters®, Canada Dry®, philosophy in advancing our
– set a bold vision to provide a Snapple®, Bai®, CORE®, Mott’s® and corporate responsibility efforts,
beverage for every need, available The Original Donut Shop®. Our robust as it scales our ability to do good.
everywhere consumers shop. route-to-market operations and selling
and distribution expertise enable us The merger made us more than just
Keurig Dr Pepper holds leadership to reach consumers anytime and a bigger company. With our united
positions in soft drinks, specialty anywhere they shop. In addition, we 25,000+ employees, expanded
coffee and tea, water, juice and employ a passionate, high-performing operations, broadened community
mixers, and markets the leading team working to seize opportunities presence and combined resources,
single serve coffee brewing system for sustainable, long-term growth. we can be a greater force for
in the U.S. Our broad portfolio of Unique to KDP is a focus on strategic making a positive impact worldwide.
KDP By The Numbers
7th
largest food and
25k
employees
125+
owned, licensed,
$11bn
in net sales
beverage company partner and
in the U.S. allied brands
Corporate Responsibility Report 2018 3
Corporate Governance Chief Sustainability Officer and Company. Each year, we require
our Vice President, Corporate all employees to refresh their
Our values, ethics and integrity Communications, Philanthropy & knowledge through training and
are deeply embedded into how Community Relations, as well as certify they’ve read and understand
we conduct ourselves and operate members of the broader Corporate the Code and other corporate
our business. Our governance Affairs staff. They regularly policies and procedures.
and management systems collaborate with a cross-functional
maintain effective oversight of,
and accountability for, the way
team of employees across the Stakeholder Engagement
organization, including from
we operate. As a publicly traded such areas as procurement, supply We are mindful of how our actions
company, KDP’s Board of Directors chain, research and development, affect farmers, suppliers, partners,
is the ultimate decision-making body, quality, facilities, human resources customers, regulatory agencies,
except on matters reserved for and legal, to drive execution and nongovernmental organizations
stockholders. The Board participates measurement of CR strategy. (NGOs), industry peers, consumers,
in the selection of executive leadership The Chief Sustainability Officer employees, investors and others.
team (ELT) members, and advises convenes the Sustainability We engage stakeholders through
them on important strategic and Governance Committee, comprised ongoing dialogue and collaboration
business matters. The Board has of key functional ELT members, which and leverage their expertise, insights,
adopted corporate governance monitors progress and approves influence and energy to elevate our
principles as a framework. It reviews key CR initiatives. The full KDP ELT performance and find new solutions
these principles on a regular basis ensures our program aligns with the to common goals.
and modifies them as appropriate long-term objectives of the business.
to comply with changing laws and KDP strives to inform our CR
regulations. In addition to overall strategies and programs with fresh,
business strategy, the Board oversees
Ethics and Compliance external perspective through formal
KDP’s corporate responsibility At the core of our ethics and and informal advisory engagements
(CR) strategy and progress, receives compliance program is our Code of with industry and subject matter
quarterly updates and approves Conduct (Code). The Code guides experts. These engagements occur
long-term sustainability goals. everyone at Keurig Dr Pepper to at the staff and ELT level to ensure
It also reviews potential stockholder make the right choices for our integration of new and innovative
proposals and issues, as well business, partners, consumers and ideas at all levels of our organization.
as legislative priorities and each other. It covers human rights,
related activities. anti-competitive behavior, conflicts
of interest, fair disclosure and
Development of vision and strategy as other topics to help integrate legal
well as the day-to-day management compliance and integrity into daily
of KDP’s CR initiatives is led by our decisions. We train every employee
Chief Corporate Affairs Officer, our on the Code when they join the
Corporate Responsibility Governance Model
Corporate Cross- Sustainability Executive KDP Board
Affairs Team functional Governance Leadership Reviews
Leads Leadership Committee Team progress
development Team Monitors Maintains through
of vision and Drives progress broad oversight quarterly
strategy execution and monthly of programs updates and
measurement and approves and progress approves
of strategy key cross- long-term
functional goal setting
initiatives
Corporate Responsibility Report 2018 4
A Message from Our Chief Sustainability Officer
2018 was a year of new
beginnings at Keurig
Dr Pepper. Now, as we
continue to integrate our
operations and capabilities,
we are finding fresh
ways to meet the needs
of our stakeholders and
communities while scaling
our ability to do good.
The work and commitments you’ll
see in this report were informed by
extensive input from stakeholders
throughout our value chain. We
arrived at a clear view of the areas We are
where we believe we can make the setting an Applying that same
biggest difference. Today, we are partnership mentality to
affirming past commitments and immediate our external relationships, we will
introducing new goals that will guide north star of circular pursue deeper engagement upstream
our efforts and impact through 2025 with suppliers and downstream
in the areas of packaging, natural packaging solutions with consumers to amplify our
resource use and supply chain for our engineers and efforts and create positive
sustainability, as well as supporting change locally and globally.
our employees and communities. product development
teams, and we are Our sustainability journey as KDP is
Notably, plastic pollution in the just beginning. We are taking action
environment is clearly an urgent
prioritizing cross- against our ambitions while scaling
challenge. We are setting an industry collaborations our partnerships to do even more.
immediate north star of circular
packaging solutions for our engineers
to help move those
and product development teams, commitments beyond
and we are prioritizing cross-industry independent ambitions
collaborations to help move those
commitments beyond independent to collective action.
ambitions to collective action. Monique Oxender
Change takes time and coordination Similarly, we can now achieve a new Chief Sustainability Officer
across the value chain; we know this scale of change simply by leveraging
from our extensive work to deliver our expanded reach as a larger
a K-Cup® pod solution that is Company. Our employee base
both recyclable and recycled. has multiplied and we are better
together. Best practice sharing
Across our business, we find strength across internal teams is unlocking
in partnerships and will use that even greater resource efficiency
principle to work with others in the opportunities and new ways to be net
industry, communities and legislators positive for energy, water and waste.
to accelerate and scale the actions
that we need today.
Corporate Responsibility Report 2018 5
Our Corporate Responsibility Goals
Environment
Refreshingly Responsible
Packaging
• Make all K-Cup® pods in the U.S. recyclable by 2020
• Convert to 100% recyclable or compostable packaging by 2025
• Use 30% post-consumer recycled content across our packaging
portfolio by 2025
Waste
• Send zero waste to landfill across our operations by 2025
Water
• Partner with our highest water-risk operating communities to replenish
100% of water used for our beverages in those communities by 2025
• Improve our water use efficiency by 20% by 2025
Energy
• Obtain 100% of electricity from renewable sources by 2025
Supply Chain
Good from the Start
• Responsibly source 100% of our coffee and brewers by 2020
• Significantly improve the lives of one million people in our supply chain by 2020
Health & Wellbeing
Better Choices, Better Lives
•
Partner with leading organizations to accelerate portfolio innovation
and transparency for health and wellbeing
Communities
Responsible Citizens, Good Neighbors
•
Provide play opportunities to 13.5 million children and families by 2020
Corporate Responsibility Report 2018 6
The Environment:
Refreshingly Responsible
As we operate our business, we are committed
to being good stewards of the environment
by finding ways to help protect, restore
and replenish the earth’s valuable assets.
Packaging We also want to further contribute
to the circular economy and commit
to using 30% recycled material
Our Goals across our portfolio by 2025, which
means a reduction in new plastic
• Make all K-Cup® pods in use and reduced carbon emissions.
the U.S. recyclable by 2020
• Convert to 100% recyclable We continually evaluate new
or compostable packaging packaging designs and concepts
by 2025 using lifecycle assessment (LCA)
tools to better understand their
• Use 30% post-consumer environmental performance
recycled content across our throughout their lifecycles.
packaging portfolio by 2025 This ensures that as we design
for sustainable packaging,
we do not simply shift the
environmental burden
Sustainable packaging is a top to other areas of the In 2018, we achieved
priority for KDP, and we continue to value chain. our commitment to
innovate for circular solutions across make 100% of K-Cup®
our portfolio. Our packaging material pods in Canada recyclable
deserves a second life, so we’re and are on track to do the
making 100% of our packaging same in the U.S. by 2020.
recyclable or compostable by 2025.
The Whole Package Matters
We are ensuring that our packaging materials are optimally designed
to be the highest value possible for recycled plastic buyers, which will
increasingly include KDP. We are replacing dark-colored plastics, making
our bottle labels and caps compatible with bottle recycling processes
and pursuing consumer education campaigns on how to ‘recycle right’,
with an aim to reduce contamination in the recycling stream.
The Environment: Refreshingly Responsible Corporate Responsibility Report 2018 7
Our Sustainable
Packaging Priorities
We focus our packaging work in three areas:
design, recovery and use of recycled materials.
Design: We continually innovate
our packaging designs and
processes to reduce our total
material usage, including
incorporating materials that are
both widely accepted curbside
for recycling and are highly valued
within the recycling ecosystem.
We adhere to the Association of
Plastic Recyclers (APR) guidelines
to ensure our packaging is
optimally designed to be recovered
by recyclers. Beyond recycling, we
are exploring material innovation
such as bioplastics, compostable
materials and reuse concepts.
Recovery: In a circular economy, brewers and we are actively As a Principal Member of the
products must be both recyclable identifying opportunities to transition World Wildlife Fund’s (WWF) new
and recycled. We partner with items that support our manufacturing ReSource: Plastic activation hub,
material recovery facilities (MRFs), and distribution sites – like pallets we have come together with peers
plastic recycling facilities (PRFs), and trays – to recycled materials1. from the beverage, food services,
processors and communities to consumer goods and packaging
confirm our packaging has value Partners are Part industries to help turn our
and can easily travel from recycling ambitious commitments into
bins to recovery facilities and then
of the Solution real, measurable action.
a useful second life. Our industry- Improving packaging solutions
leading work on recyclable K-Cup® for product quality, consumer use, Keurig Dr Pepper was an initial
pods, which has benefited plastics recoverability and reuse requires investor in the $100 million Closed
recycling widely and set a new collaboration of all players along the Loop Fund, which provides zero-
bar for producer responsibility, value chain. Using our strength in or low-interest loans to public and
is a model for how we’ll approach forming partnerships, we collaborate private entities to expand and
our work across our portfolio. closely with a number of industry enhance recycling infrastructure
groups, NGOs, investment firms and and sustainable manufacturing
Recycled materials: Expanding communities. technologies. We have committed
our use of post-consumer recycled $10 million over 10 years to advance
(PCR) materials is a critical The Ellen MacArthur Foundation’s the circular economy, and our
element of being a responsible mission is to accelerate the transition investment to date has supported
product steward and contributes to a circular economy. We joined the such progress as 350,000 recycling
to a circular economy by closing Foundation’s Circular Economy 100 carts distributed to communities
the loop for valuable materials. (CE100) network in 2016 and have across the U.S. and over 850,000
Across all packaging materials, signed its “New Plastics Economy tonnes of waste kept out of landfills.
we are working to reach 30% PCR Global Commitment” this year to
by 2025. We are also beginning to join others in building a circular
use recycled plastic in our Keurig® economy for plastic.
1 The scope of our 30% PCR goal pertains to all primary and secondary packaging materials, such as K-Cup® pods.
Progress on the inclusion of PCR to hard goods like coffee brewers and items supporting the business will be reported separately.
The Environment: Refreshingly Responsible Corporate Responsibility Report 2018 8
recyclables collected at the curb in We are also members of the
communities in California, Oregon How2Recycle standardized
and Washington, working with labeling system, which
Our work with state and municipal leadership communicates recycling
The Recycling to develop tactics and tools locally instructions clearly on packaging.
Partnership has to encourage residents to recycle By providing simple, consistent
helped to collect over more and recycle better. guidance on how to recycle, we
avoid confusion and empower our
180m Through our multi-dimensional consumers to take active steps
pounds partnership with Keep America to easily recycle our products.
of recyclables. Beautiful (KAB), KDP has invested All of our recyclable K-Cup® pods
in educating and encouraging will use the How2Recycle label
people to recycle. Since 2011, we’ve as we expand availability in the
partnered with KAB to place more U.S. in 2019 – joining
Since 2016, we have invested more than 5,200 recycling bins in public the growing number
than $1 million in The Recycling spaces, such as parks, athletic fields, of products and
Partnership (TRP), which leverages beaches and walking trails across packages utilizing
seed grants and partnerships 44 states. Together, we’ve helped this standardized
to raise money to improve and collect 1.8 million pounds of approach to
increase recycling in communities recyclables and prevented nearly improve recycling
across the U.S. With our support, 3,000 metric tonnes of carbon dioxide- behaviors.
TRP placed more than 490,000 equivalent (MtCO2e) emissions. In
recycling carts in over 640 local 2019, KDP-sponsored recycling bins
communities as of the end of will become a key feature in our Let’s
2018, leading to the collection Play playground builds across the U.S.
of approximately 180 million
pounds of recyclables. In 2019, we are seeking membership
in the Ocean Conservancy’s Trash
To tackle the contamination Free Seas Alliance and will benefit
challenges on the West Coast, from their robust data and research
we are supporting TRP’s West on marine debris to inform our
Coast Contamination Initiative. investments in bins near waterways
Our $600,000 investment will to eliminate litter flowing into
help increase the quality of our seas.
Grounds to Grow On®
Our Grounds to Grow On® program offers
workplaces an easy way to collect their brewed
K-Cup® pods to be recycled. Participants are
provided a bin to fill and we use UPS’ carbon
neutral shipping option to transport the pods to
g2 revolution®, an innovative recycling company.
Our K-Cup® pod components are then
recycled into new products —
like aluminum cans and shipping
pallets — and the coffee grounds Through our
are composted locally. Through Grounds to
this program, we have helped Grow On® program,
keep a total of 450 tonnes of we have helped keep
450
material in circular use.
tons of material in
circular use.
The Environment: Refreshingly Responsible Corporate Responsibility Report 2018 9Recycling Done Right pioneering a unique, award-winning testing methodology
that utilizes radio-frequency identification (RFID)
technology to track the pods as they travel through
We are on track to make 100% of our K-Cup® pods in the recycling systems.
U.S. recyclable by 2020. In Canada, we met this goal in
2018, and are now applying what we learned to our U.S. The tests provide 100% traceability, validating our
roll-out of recyclable pods. pods can be recovered with existing equipment and
reach buyers who see value in giving them a second life.
Like all of our work, partnership and collaboration were To our knowledge, no other company has gone to such
at the heart of making progress against this important lengths to confirm a product can be recycled. The results
goal. We worked with recyclers, manufacturers, our of this testing and engagement with recyclers and
own engineers, end-market reclaimers and industry communities have established a new model for producer
experts – like the Association of Plastic Recyclers and responsibility and benefited a whole category of
the Sustainable Packaging Coalition – to find just the recyclable plastic, shedding light on how best to recycle
right materials and processes to make recyclable K-Cup® and recover polypropylene, a valuable material.
pods a reality.
After assessing what material would be both recyclable
and recycled, we chose polypropylene (#5 plastic) for our
K-Cup® pods. Our polypropylene pods enable us to deliver
the same high quality, great tasting coffee experience
consumers have always enjoyed from Keurig. #5 plastic
is accepted curbside by the majority of communities
across North America, and there is growing demand
for #5 plastic as a reusable material in other products,
such as automobile parts, children’s toys, storage bins
and outdoor furniture.
We’ve proven our pods can easily flow through existing
recycling infrastructure. We have conducted more than
12 tests at scale in MRFs throughout North America,
Waste Our coffee roasting and packaging
plants have made significant
• K-Cup® pods that fail our quality
inspection are collected and sent
progress to eliminate waste. for dismantling. Most of our
For example: manufacturing plants extract the
Our Goal
coffee for composting and send
• Green coffee often comes to our
• Send zero waste to landfill the remaining material to energy
plants in burlap bags, which get
across our operations by 2025 recovery facilities. In Canada, our
reused as other products, such
Montreal, Quebec, facility is testing
as insulated coolers and textiles.
a pod dismantler that will enable
• The coffee roasting process cleaner separation of materials
produces chaff, or husks from for recycling and reuse.
We strive to eliminate waste in
coffee beans. We compost this
all our manufacturing processes.
material, returning key nutrients
We prioritize reduction and reuse
to the soil.
opportunities, followed by recycling
and composting, and finally energy
recovery where required. As a
combined Company, we reached
an 86% waste diversion from
landfill rate in 2018.
The Environment: Refreshingly Responsible Corporate Responsibility Report 2018 10Our cold beverage plants also have Water Stewardship Good decisions about water resources
programs to eliminate waste and happen at a local level and take into
maximize the recovery of packaging account water availability and
materials for recycling. For example: Our Goals community water needs. We have
used the Ecolab Water Risk Monetizer
• Our Williamson, New York, facility • Partner with our highest and the World Resources Institute’s
works with local composters to water-risk operating Aqueduct Water Risk Atlas to
process waste from our apple communities to replenish evaluate water risk in our operating
juice and sauce production. 100% of water used for footprint and have identified six
• In Mexico, we collaborate with our beverages in those operating communities with high
a nonprofit environmental communities by 2025 water risk across Texas, California
association, ECOCE, A.C., for • Improve our water use and Mexico.2
plastics recovery to close the efficiency by 20% by 2025
loop. Our manufacturing plants In these six at-risk communities,
throughout the country work with by 2025, we commit to restoring
ECOCE to recover post-industrial the same volume of water we use
PET plastic for recycling. Currently in our local operations to make our
93% of our waste in Mexico is Water is a vital natural resource beverages through projects that
recycled and reused. important to our business and, enhance watersheds, protect
as a beverage company, we have habitats and conserve water.
We regularly conduct waste a particular responsibility to be By balancing what we consume
audits at all our beverage facilities good stewards of water use in our and what we replenish, we will
across North America. As we operations and communities. We help provide access to more or
integrate our processes and continue assess water use across our business higher quality water to benefit
to build a zero-waste culture at KDP, to understand our water footprint the environment and the people
we see valuable opportunities to share and identify opportunities related to who live and work in these areas.
best practices across our operations. quality, conservation, replenishment
and wastewater treatment in our We are also committed to improving
manufacturing plants. our water use ratio (WUR) by 20% by
2025, moving from a 2017 baseline of
2.05 liters required to make one liter
of product (L/L) to 1.64 L/L*. Our
progress is underway with a WUR of
1.98 in 2018, down 3.4% versus 2017.
Currently
93%
of our material redirected
from landfill in Mexico is
recycled and reused.
2 The risk assessment also considered the percentage of total production
and site-specific conditions for each site. While the local conditions and
issues vary, each of the six sites has high baseline water stress.
* Upon the issuance of this report in July 2019, Keurig Dr Pepper included
an incorrect target water use ratio of 1.7 L/L in 2025. It was corrected
by the Company in August 2019.
The Environment: Refreshingly Responsible Corporate Responsibility Report 2018 11Partnering for Balance
We partner to positively impact water quality
and availability in several ways. We work with
The Nature Conservancy and other partners to identify
and understand the watersheds in the areas where we
operate, collaborating to invest in targeted solutions.
Since 2011, we have committed $4.5 million to The Nature
Conservancy’s local chapters in Vermont, Washington,
Texas and California, where we have production facilities.
As a result of this collaboration and other active projects
over the last five years, we have restored 5,390 million
liters of water in those communities.
In Houston, Texas, our investments contributed to a
native prairie restoration project to protect freshwater
ecosystems and preserve coastal habitats. Restoring
native grasses decreased runoff and enabled the land
to absorb and disperse water from storm surges and Prairie restoration project
floods, providing a cost-effective way to protect coastal Houston, Texas
communities from the impacts of storms and hurricanes.
Water-Efficient • Ingredient water preparation:
Manufacturing Operations Where we use reverse osmosis
to pretreat water that goes into
While coffee processing is relatively our beverages, we are optimizing
dry, all of our cold beverage these operations to reduce
manufacturing processes require waste water from this process.
water to ensure cleanliness and
quality. We track our water usage • Product quality: We continually
and partner with the beverage work to reduce product rejected
industry as members of the Beverage for quality reasons, which will
Industry Environmental Roundtable avoid wasting water.
to leverage best practices in site
water management and stewardship.
We strive for operational efficiency
in these areas: Operational Water Data
ML in 2018
• Equipment cleaning: We use water Year (million liters)
to clean manufacturing equipment,
both for sanitation and to maintain Total Withdrawal 13,070
flavor integrity when changing Total Consumption 7,497
from one drink flavor to another.
We optimize our manufacturing Total Discharge 5,573
schedules to reduce flavor % Withdrawal Municipal 75%
changeovers, which saves water
% Withdrawal Groundwater 25%
while meeting food safety
requirements. % Discharge to Municipal 66%
% Discharge to Waterbody 34%
% Discharge Other (to septic)Our Water Footprint Focusing on the top two of these We manage these risks through our
commodity ingredients, we analyzed Supplier Code of Conduct, product-
Taking a full value chain view,
the water risk across quantity, quality specific standards, and investment
we completed a water footprint
and climatic trends. and engagement with our supply
assessment to understand the
chain. Our Supplier Code of Conduct
different causes and magnitude • For coffee, shifting rainfall patterns
specifically denotes water use
of our water impacts. KDP’s water and higher temperatures with
optimization, management and
footprint, using a 2017 baseline, climate change are affecting the
tracking as expectations of suppliers,
indicates that our direct water use suitability of some coffeelands for
while our supply chain investments
(7 billion liters) is less than half of one production. Additional challenges
focus, in part, on water security and
percent of our total water footprint in the majority of our coffee-
climate resiliency. In our coffee supply
(2,084 billion liters*) across our supply sourcing regions include access
chain, we address these linked issues
chain. The largest portion of the to safe drinking water, flooding
through funding research on climate
enterprise water footprint comes and water pollution from green
adaptation for farmers and plants,
from indirect water use consumed coffee processing.
and investing in initiatives that
in growing agricultural raw materials.
• For U.S.-grown corn, there are provide improved drinking water and
Within this portion of our water
three key water risks: water management in coffeelands.
footprint, 98% of the green water
footprint and 92% of the blue water –– Baseline water stress: 35% of
footprint is attributed to six key raw U.S. corn is grown where the
materials: coffee, high fructose corn underlying water resource is
syrup (HFCS), apple juice concentrate, already stressed from scarcity/
sugar, cocoa and apples. overuse or pollution;
–– Water quality: unregulated
fertilizer usage and resulting
runoff can degrade both surface
and ground water quality3; and
–– Climate change: increasing
frequency and severity of
droughts and precipitation
events can damage corn crops.4
Our Water Footprint**
Green Blue
Raw materials 97% 91%
Processing 0% 2%
Green Water Blue Water Packaging 3% 1%
1,805 279
Energy 0% 5%
Use/Consumption 0% 1%
billion liters billion liters
Green Water Footprint = Blue Water Footprint = volume of
volume of rainwater consumed surface or groundwater consumed
(e.g., for growing crops) (e.g., irrigation water for crops, or
process water in operations)
* Upon the issuance of this report in July 2019, this value was incorrectly noted as 2,077 billion liters. It was corrected by the Company in August 2019.
** Upon the issuance of this report in July 2019, the Green Water and Blue Water values were incorrectly noted as 2,077 billion liters and 7 billion liters,
respectively. They were corrected by the Company in August 2019.
The Environment: Refreshingly Responsible Corporate Responsibility Report 2018 13Energy and Emissions Greenhouse Gas Emissions, 2018
Tonnes of carbon
dioxide equivalent % of total % of Scope 1
Our Goal
Scope 1: 273,576 68%
• Obtain 100% of electricity
used in operations from Stationary 116,495 29% 43%
renewable sources by 2025 Mobile 157,081 39% 57%
Scope 2* (Indirect emissions, 137,560 32%
purchased energy)
Scope 1 and Scope 2 Total 411,136 100%
We are focused on reducing our
energy use and greenhouse gas (GHG) Scope 3 (Indirect emissions, value chain) 6,428,206 100%
emissions to lessen our environmental
3rd party data verification completed by Lloyds Register
impact. Our GHG emissions are Quality Assurance, Inc. (LRQA) with limited assurance. *Market-based
primarily indirect (Scope 3), with
packaging production being a
significant driver. Our direct Before the merger, Keurig Green We have joined the Science Based
emissions (Scope 1) come from Mountain met its 2020 GHG Targets Initiative (SBTi) to develop
our operations and logistics within reduction goal of 25% in 2016. a more comprehensive emissions
our control. We strive to lessen our As KDP, we will continue on this reduction target that will cover
overall impact by choosing responsible progressive path. We have set a goal emissions from our entire value
materials for our products, operating to obtain 100% of electricity used in chain in the near future.3
our manufacturing plants efficiently operations from renewable sources
and reducing fossil fuel use in our by 2025, but we’re not stopping there.
operations and fleet.
Our GHG Footprint
Our GHG footprint outlines the emissions impacts of
our full value chain. This encompasses emissions from
operational fuel use (Scope 1); electricity consumption
(Scope 2); and supply chain, product use and disposal
(Scope 3). The data for our 2018 footprint includes fuel
usage and utilities data from our operations, supplier
data where available (for example, for third-party 2018 Total: 6.84 million metric tonnes of
logistics), modeling and industry estimates. carbon dioxide-equivalent emissions (tCO2e) % of Total
Scope 1 emissions
Scope 1 + 2 emissions Operations Fuel Use 4%
6%
Scope 2 emissions
Electricity 2%
Scope 3 emissions
Packaging 43%
Product Materials 13%
Scope 3
94% Supplier Operations and Manufacturing 9%
Logistics 8%
Retail 12%
Product use 6%
End of life 2%
3 What is a Science Based Target?
The Environment: Refreshingly Responsible Corporate Responsibility Report 2018 14Renewable Energy Reduction and Efficiency
To meet our new goal to obtain 100% In our manufacturing facilities, we
of our electricity for our operations pursue efficiency by implementing
from renewable sources by 2025, we lighting upgrades, using low-energy
will build on our historical renewables idling mode on equipment, scheduling
investments. Keurig Green Mountain production efficiently, conducting
purchased renewable energy leak audits and other techniques.
certificates (RECs) commensurate In our coffee plants, efforts to
with its electricity consumption improve roasting efficiency through
and Dr Pepper Snapple secured monitoring and operating procedures
renewables for its LEED certified yielded a 6% reduction in energy
Victorville facility and Plano (therms) per pound of coffee roasted
headquarters. We have reduced in 2018.
the impact of our energy use by
purchasing renewable electricity Energy efficiency is an important
for our coffee manufacturing consideration when we upgrade
facilities through approximately facilities and build new ones. In
85% wind and 15% solar electricity. our plant under construction in
As the opportunities for corporate Spartanburg, South Carolina, for
renewables investment evolve, example, we are incorporating
we will seek to have impact with our packaging line technologies to
purchases, while continually focusing increase energy efficiency and energy
on efficiency in our own operations. sub-metering to support continual
performance improvement. In that Our hot beverage
facility, we will use catalytic oxidizer operations use
100%
pollution controls in our coffee
roasting to reduce our reliance on
fossil fuels, while still meeting
pollution control requirements. renewable energy.
Energy Benefits of
Sustainable Products
We use lifecycle assessment (LCA)
tools to find ways to use fewer
resources during material production
and to inform design of our products.
As an example, transitioning our
K-Cup® pods from a #7 plastic with
limited recyclability to fully recyclable
#5 polypropylene will result in a
27% reduction in the K-Cup® pod’s
packaging GHG emissions. In addition,
we have introduced an Auto-Off
feature as part of our Keurig® brewers,
which automatically turns the brewer
off after two hours of idle time, using
75% less energy.
The Environment: Refreshingly Responsible Corporate Responsibility Report 2018 15Our Fleet
Maintaining an efficient fleet is
one way to reduce greenhouse gas
emissions in our operations. Keurig
Dr Pepper’s fleet is comprised of
more than 10,500 trucks, forklifts
and pallet jacks used to transport
our products to market safely and
efficiently. These vehicles meet
all U.S. Environmental Protection
Agency (EPA) emissions standards.
Beyond our own fleet, we leverage
the EPA’s SmartWay program
to maximize fuel and emissions
savings in our third-party logistics.
We continually look for ways to
improve our fleet’s fuel use efficiency.
We maintain a young fleet, replacing
vehicles after approximately six years
of use with more fuel-efficient models.
In 2018, we replaced 60 heavy-duty
trucks with medium-duty models to
further improve our gas mileage.
Driving Emissions
Reductions Using
Electric Forklifts
In 2019, we are piloting a program to convert 35 forklifts
from propane to electricity, which we anticipate will
reduce our propane usage by 35,000 pounds and our
carbon dioxide-equivalent emissions by 71 metric tonnes
for the year.
Based on the success we’ve seen so far, we’re working
on a rollout plan to convert 200 more forklifts to electric
power, which will deliver an anticipated 771 metric tonnes
of carbon dioxide-equivalent emissions reduction.
The Environment: Refreshingly Responsible Corporate Responsibility Report 2018 16Supply Chain:
Good from the Start
We are committed to ensuring we source
our ingredients and materials responsibly.
It takes thousands of suppliers Coffee Sourcing Responsibly
providing a wide range of ingredients
Beyond our Supplier Code of Conduct,
and materials across several supply
we are committed to sourcing our
chains to create our high-quality Our Goals coffee responsibly, in part, by purchasing
beverages and brewers. Keurig
beans certified to sustainability
Dr Pepper is one of the largest coffee • Responsibly source 100%
standards, including Fair Trade™,
purchasers globally and has a long of our coffee by 2020
Rainforest Alliance® and UTZ.4 Keurig
history of meaningful engagement,
• Significantly improve the lives Dr Pepper has purchased Fair Trade
collaboration and positive impact
of one million people in our coffee since 2000 and has been the
with the people and organizations
supply chain by 2020 largest buyer of Fair Trade coffee in
at the very beginning of the coffee
the world since 2010. In 2018, we
supply chain. We are exploring how
responsibly sourced 31% of our coffee,
the model of responsible engagement
and we have a clear path to achieve
and impact we have long applied to
We realize that the coffee industry 100% by the end of 2020 through
coffee can apply to our expanded
faces serious challenges. Climate certifications and other sustainable
supply chain – including commodities
change threatens the viability of sourcing programs.
like aluminum, apples, corn and
other sweeteners. We expect to coffee cultivation, and volatile prices
set broader responsible sourcing affect profitability for farmers Keurig Dr Pepper has
goals beyond our existing coffee in communities around the world been the largest buyer
commitments in the future. that have long relied on income
from coffee. of Fair Trade® coffee
Importantly, we have developed in the world since 2010.
a new Keurig Dr Pepper Supplier These challenges have the potential
Code of Conduct that sets out to negatively impact the availability
universal requirements applicable of high-quality coffee over the long
to our suppliers. Our guidelines term and risk driving away the next
look to ensure respectful and safe generation of farmers. That’s why we
working conditions and responsible believe sourcing coffee ethically and
environmental practices across responsibly goes beyond traceability
our supply chain, among other or an audit checklist. Through
requirements. Where necessary, engagement, action and partnerships,
we go further by specifying we collaborate with farmers to
product-specific standards such address challenges, helping them
as independent raw material thrive in a changing world.
certifications and manufacturing
standards. We complement these
policies with employee training
on our Supplier Code of Conduct,
as well as deeper research and
supplier engagement on key 4 Rainforest Alliance and UTZ combined in
labor and environmental risks. 2018, keeping the name Rainforest Alliance.
Sourcing: Good from the Start Corporate Responsibility Report 2018 17Engaging Farmers By promoting better farming We measure our impact on farmers’
techniques, we help farmers to lives using a monitoring and
To better understand the issues
increase their crop yields and income, evaluation system. For example,
coffee farmers face, we immerse
and diversify their crops for improved if a program is designed to improve
ourselves within their communities,
food security. a farmer’s yield, we ask our partners
including getting to know the
to provide us with data not only
cooperatives that often support
We also support projects that teach on how many farmers attended
them. We are focused on deepening
coffee farmers to be good water training, but also whether those
our understanding of our farmers’
stewards, which can reduce the farmers adopted new practices
specific needs and how we can help
impact of climate change on their on their farms.
improve their livelihoods so they can
farms and in their communities. KDP
stay on their farms and continue to
has invested more than $5 million in To date, we have engaged more than
reinvest in their crop.
Blue Harvest over the last five years 630,000 farmers, workers, families
to promote sustainable farming and community members in our
Tangible Impact practices and increase access to supply chain, and we are on a path
We actively address on-the-ground clean water for coffee farmers and to reach our goal of improving the
issues in areas where we source our communities in Central America. lives of one million people by 2020.
coffee. Our social impact investment This program has trained more than
program has existed since 2003 and 2,800 farmers to apply water-smart
has invested more than $60 million practices on their coffee farms,
toward improving the livelihoods protected more than 40,000 hectares
of coffee farmers. In 2018, we of critical watersheds and improved
supported investment projects with drinking water for more than
organizations in Colombia, Uganda, 100,000 people.
Peru, Brazil, Honduras, Mexico and
beyond, engaging farmers and
their families on a range of issues.
Visiting the Source to As KDP, we have expanded these opportunities, allowing
selected employees in every function and level of the
organization to participate in a trip. In 2018, more than
Expand Our Knowledge 60 employees went on source trips to important coffee-
growing regions, including Mexico, Costa Rica, Peru,
Colombia and Brazil. They met farmers and their families
For 25 years, we have invited employees to travel to areas
and learned first-hand, through workshops and hands-on
of the world where we source our coffee to learn about the
training, how much effort goes into sustainably sourcing
hard work and dedication that goes into growing healthy
our coffee.
coffee trees and harvesting every bean.
“One thing I took away from this trip is a better
understanding of the impact our Company has had at
origin,” said Pam Daskalakis, Vice President Business
Cost Management, after an origin trip to Peru.
“Over many years in Peru, our Company has trained
coffee quality professionals, funded innovative organic
fertilizer plants and supported numerous programs
to promote diversification and sustainability to improve
the lives of coffee farmers.”
These experiences inspire our employees and educate
them on the coffee value chain, while building relationships
with our supply chain partners. They also underscore our
commitment to ensuring our leaders and employees
understand the challenges coffee farmers face and the
unique impacts KDP has on those challenges.
Sourcing: Good from the Start Corporate Responsibility Report 2018 18Partnering for
Meaningful Change
Collaboration is critical in ensuring a strong
and sustainable coffee industry, and we
have longstanding partnerships to help
us in that ambition, including:
World Coffee Research
World Coffee Research (WCR)
is an industry-backed R&D
organization focused on growing,
protecting and enhancing coffee
as a global crop. Its goal is to build We have
farmers’ capabilities to adapt to invested more than
$3m
climate change and adapt coffee
plants to deal with increasing
environmental stresses. Keurig Green Root Capital
Mountain was a founding member We have an enduring 20-year since World Coffee
and now, as Keurig Dr Pepper, partnership with Root Capital, Research was formed
we are one of the organization’s a nonprofit agricultural lender. in 2012.
largest donors, having invested Root Capital provides smallholder
more than $3 million since WCR enterprises with access to capital and
was formed in 2012. expertise to develop independence,
sustainability and competitiveness. Sustainable Coffee Challenge
Since 2017, we invested more than We are a founding partner in the
$1.3 million in Root Capital through Sustainable Coffee Challenge
the Feed the Future Partnership for (SCC), a collaborative effort
Sustainable Coffee, co-funded by the of companies, governments,
We are forever grateful United States Agency for International nongovernmental organizations,
Development (USAID). Through this research institutions and others
to Keurig Dr Pepper. program, Root Capital has provided to make coffee the world’s first
Having a leader in on-site training to 61 small producer sustainable agricultural product.
More than 120 partners are working
the coffee industry organizations to date serving more
to align on a common vision for
than 45,000 coffee farmers.
recognize that a long- sustainability in coffee and to
term sustainable future SAFE Platform promote demand for sustainable
The Sustainable Agriculture, Food coffee. KDP provides leadership
for coffee depends on and Environment (SAFE) Platform via representation on their Advisory
agricultural research is a multi-stakeholder alliance initiated Council and also via participation
blazed a trail for the by the IDB-Lab to improve farmers’ in the Sourcing and Labor
livelihoods through climate-smart working groups.
rest of the coffee agricultural practices. We are a
industry to follow. founding member and have co-funded Sustainable Food Lab
The result is an amazing several projects, including one led by We are a member of the
Oikocredit to train cooperatives in Sustainable Food Lab (SFL) and
collaboration to create a Latin America to better manage risk hold a board seat on this nonprofit
nonprofit, global coffee associated with coffee price volatility. organization that is helping to
create sustainable mainstream
research center that will With a mission to bring together
food systems worldwide. Through
the private and nonprofit sectors
hopefully change the to improve business processes and our SFL membership, we engage
future of coffee. include smallholder farmers in global with peer companies that source
value chains, SAFE has sparked agricultural products on topics
Tim Schilling such as measuring sustainability
collaboration among key coffee
Founder, performance and promoting
industry players.
World Coffee Research climate change resilience.
Sourcing: Good from the Start Corporate Responsibility Report 2018 19Appliances A Partner in Responsible
Appliance Sourcing
We are a member of the Responsible
Our Goal Business Alliance (RBA), the world’s
largest industry coalition focused
• Responsibly source 100%
on corporate social responsibility in
of our brewers by 2020
global supply chains. RBA members
commit to a common Code of
Conduct, which is a set of social,
environmental and ethical industry
We offer a full range of coffee standards.
brewers that fit any lifestyle or
location, and each of our Keurig® We regularly assess our suppliers
brewers has been engineered through against the RBA Code of Conduct
continual innovation to deliver the using the RBA’s Validated
most consistent, convenient and Assessment Program (VAP)5,
great-tasting coffee experience. and invest in training for them and
Our brewers are manufactured our employees to ensure their ongoing
in China, Malaysia and Italy, using compliance. The suppliers we consider
various materials and components in scope for our 2020 target are
that come from all over the world. our Alliance and Strategic Appliances
suppliers, according to the criteria
We partner with suppliers to of our Supplier Performance
source our appliances ethically and Management Program6. These
responsibly, using primarily third- include our most important appliance
party audits to measure supplier finished goods, component, accessory
compliance. Where needed, we and packaging suppliers. By working
provide training and one-on-one closely with these suppliers on health
support to elevate suppliers’ and safety, labor, environment,
compliance levels. To address risk management systems and ethics,
further upstream, we perform annual we considered 50% of our in-scope
conflict minerals due diligence and suppliers to be responsibly
detail these measures and results sourced at the end of 2018.
on our website and in our SEC filings.
5 We require our suppliers that are considered high-risk to meet the RBA VAP Recognition
Program Silver level. We require medium-risk suppliers to complete an RBA Self-Assessment
Questionnaire with a passing score, and low-risk suppliers to sign off on our Responsible
Sourcing Supplier Guidelines. In 2018, all suppliers were considered high-risk except for one
that was considered low-risk.
6 The Supplier Performance Management program is KDP’s company-wide program
to develop focused and impactful category strategies, manage and improve supplier
performance and proactively assess and mitigate supplier risk.
Sourcing: Good from the Start Corporate Responsibility Report 2018 20Health and Wellbeing:
Better Choices, Better Lives
Our health and wellbeing commitment to consumers is
simple: provide a balanced portfolio of beverage options
and the resources consumers need to make informed
choices for themselves and their families.
To support parents in
Our Commitment making the choices that are
right for their families, we
• Partner with leading joined the Children’s Food
organizations to accelerate and Beverage Advertising
portfolio innovation and Initiative (CFBAI) and will
transparency for health pledge not to market
and wellbeing products that do not meet
its nutrition criteria directly
to children under 12.
We have a well-balanced portfolio, Our efforts are informed by the
with approximately 300 of our World Health Organization’s
ready-to-drink options containing Global Action Plan for Combating
100 calories or less. For most of Non-Communicable Diseases and
our full calorie beverage varieties, demonstrate specific recommended
we offer a zero, low or mid-calorie actions around clear labeling,
option. In addition, we offer a wide responsible marketing and reduction
range of serving size options across of added sugars.
our portfolio, enabling consumers to
enjoy their favorite beverages in just
the amount they want.
Expanding Our
Water Portfolio
In 2010, we became founding We continue to innovate and evolve
members of the beverage industry’s our product offerings to meet our
Clear on Calories initiative, which consumers’ changing needs. In 2018,
added an easy-to-read calorie label we significantly expanded our owned
to the front of every can, bottle and water portfolio through the
pack we produce and included calorie acquisition of CORE® Hydration, a
information on company-controlled premium, nutrient-enhanced bottled
vending machines. We provide water, and CORE® Organic, fruit-
nutrition, ingredient and allergen infused functional water. In addition,
information online through our we entered into a new long-term
product facts website and will master distribution agreement in
continue to enhance our transparency the U.S. with evian®, the global leader
and communication to consumers in premium natural spring water.
regarding our beverages. We also saw continued growth
in our Bai® flavor-enhanced and
antioxidant-infused water and in
our Canada Dry® sparkling waters.
Health and Wellbeing: Better Choices, Better Lives Corporate Responsibility Report 2018 21More Choices decision points, such as coolers, in beverage calories per person
shelves and registers, to encourage from 2014 through 2017 in packaged
for Families our consumers to balance what beverages sold in places like grocery
they drink with what they do. stores, convenience stores and large
In the spring of 2018, store chains.7
we introduced Mott’s We take that commitment one
Sensibles™ to bring step further through our Let’s Play Additionally, BCI puts a special focus
initiative, which provides funding, on five communities where obesity
families a product that equipment and play spaces for rates are well above the national
is 100% juice, but with kids and families to make active average and there is less availability
play a daily priority. Let’s Play and demand for beverages with
30% less sugar than
programs are executed through less sugar or smaller portion sizes.
regular apple juice. strong partnerships with national Our work, along with that of our
In addition, Mott’s nonprofits, KaBOOM! and peers, encourages retailers and
Good Sports. distributors in these communities to
Sensibles™ has offer a greater variety of beverages,
no added sugars, Helping People devote more display space to
artificial Consume Less Sugar low- and no-calorie options and
smaller portion sizes, and feature
sweeteners, In 2015, we joined industry peers,
information promoting balanced
flavors or the American Beverage Association
lifestyles. In 2017, each targeted
and the Alliance for a Healthier
colors. community showed calorie reduction
Generation in establishing the
ahead of the needed pace to meet
Balance Calories Initiative (BCI).
their goals and exceeded the national
Through this voluntary effort, our
Promoting Balance calorie reduction pace.
goal is to reduce beverage calories
Promoting healthy lifestyles depends consumed per person nationally
We will continue to be active partners
on encouraging consumers to balance by 20% by 2025.
in BCI to help achieve our national
what they consume with the energy goal and to drive further positive
they expend. Along with our peers Recent data shows BCI is shifting
change. We will also apply the lessons
in the beverage industry, we provide consumer behavior toward a broader
learned from this industry initiative
retailers with “Think Balance” array of lower calorie beverage
to our company-specific efforts.
collateral to place at purchase choices, with a reported 6% reduction
7 2025 Beverage Calories Initiative: Report on 2017 Progress toward the National Calorie Goal.
Underserved Kids Get
New Opportunities
to Play
Richfield Public School Academy in Flint, Michigan,
has more than 500 students in grades two through
eight living in neighborhoods without structured outdoor
play areas. In 2018, Keurig Dr Pepper partnered with
the school and our nonprofit partners, Good Sports and
KaBOOM! for a Let’s Play Day. This event brought nearly
170 volunteers from Keurig Dr Pepper and the community
together to build a playground – installing a rock-climbing
wall, zip lines and a merry-go-round, as well as new
benches, planters, trash collection and recycling bins.
In 2018, Let’s Play was one of three
Volunteers also sorted through and packaged more finalists for “Best Community
than $122,000 in sports equipment donated by Keurig Improvement Program” in the U.S.
Dr Pepper that was provided to youth-focused organizations
across Flint. Thanks to this work, more than 100,000 Chamber of Commerce Foundation’s 19th
children in Flint are enjoying new opportunities to play. Annual Corporate Citizenship Awards.
Health and Wellbeing: Better Choices, Better Lives Corporate Responsibility Report 2018 22You can also read
