Latest news with #Cofer
Yahoo
2 days ago
- Business
- Yahoo
The CEO giving Keurig Dr Pepper a massive energy jolt
It's a cloudy afternoon in late March in Burlington, Mass., the Boston suburb that's the site of co-headquarters for Keurig Dr Pepper. CEO Tim Cofer—who's just dropped off his suitcase after arriving from KDP's second home base in Frisco, Texas, near Dallas—is guiding Fortune through the glass-framed modern office building which contains a warren of showrooms. One displays all 16 flavors of Dr Pepper, another shows a panoply of new energy drinks; walking down the hall we visit a gallery arraying dozens of Keurig models, from the K-Mini for dorm rooms to a business-size brewer at over $1,000. Between extolling the products in each room, the super-salesman describes the promise of this world of liquids, where he's never worked before, and his mission for KDP. Cofer is instilling the élan of a scrappy underdog in this old-line corporation of 29,000 employees. 'We're hungry, we like to disrupt; this is a challenger culture where we play offense, not defense,' he explains, while standing before a neon-rainbow rack of cans. 'There's a real sweet spot where a company's large enough to bring the scale in investment and distribution to win in a big way, but keeps the mindset of being nimble, aggressive, and continually dissatisfied with the status quo,' he says. It's what motivated Cofer to woo the 38-year-old entrepreneur who founded the popular energy drink Ghost, and in October strike a $1.65 billion deal to acquire the brand. The caffeine-like high of the Ghost tie-up exemplifies the jolt Cofer's delivering to make KDP an increasingly formidable challenger to the long-ruling kings of beverage, Coca-Cola and PepsiCo. Since joining KDP first as COO in November of 2023, then as CEO in April of last year, Cofer's been adding fast-growing, high-margin new offerings, from energy and sports hydration drinks to refreshers to ready-to-quaff iced coffees, while simultaneously supercharging the 140-year old flagship Dr Pepper as a top pick for the Instagram generation. Thanks largely to snazzy marketing that's enticed the quicksilver Gen Y and Gen Z demographic, classic Dr Pepper has raced from a distant third just a few years back to surpass regular Pepsi as the second-bestselling soft drink in North America behind Coke. In fact, KDP itself—like its signature non-cola—is a one-of-a-kind concoction, the product of a highly experimental blending of businesses. It's the sole big marketer to combine huge franchises in both hot and cold beverages. That union happened in mid-2018 via the $18.7 billion merger of Dr Pepper Snapple and coffee maker Keurig Green Mountain, making KDP by far the most diversified enterprise in nonalcoholic or 'refreshment' beverages with over 125 brands where it's an owner, investor, or distributor. The mating proved a giant success during the pandemic. As the crisis began, then-CEO Bob Gamgort, now KDP's chairman, brilliantly exploited data flowing from home coffee makers wired to data centers, deploying AI to foresee a spike in demand for coffee and bedrock soft drink brands in the sudden switch to the stay-at-home economy. Gamgort ramped up production of Dr Pepper, Canada Dry, and K-Cups, and secured big shipments of cans from Mexico well before rivals saw the wave building. But since 2022, KDP's coffee sales have flattened, pressured by a sharp rise in the cost of the raw beans that raised the price of K-Cup pods and pushed folks toward instant brands and making their own. 'Now, their crown jewel is beverage, and their problem child is coffee,' notes Connor Rattigan, an analyst at global data provider Consumer Edge. To lift KDP to Coke-and Pepsi-level profitability, Cofer needs to perform the tough, dual task of making high-margin hits on the supercompetitive soft drink side, while reheating coffee. He's got big plans for both. Though little-known for such an important CEO, Cofer spent a long pre-KDP career hopping the globe while recharging and merging many of the most celebrated brands in consumer packaged goods. The C-suite prized Cofer's knack for engineering quick turnarounds, and cycled him through jobs relatively quickly. He would typically put sales on the fast track, then get the call to move on. Cofer grew up in White Bear Lake, Minn., on the outskirts of Minneapolis/St. Paul, that's renowned as a summer resort for angling largemouth bass, and whose namesake Mark Twain described as 'lovely sheet of water.' His father started as a line foreman at a 3M ceramics plant, and rose to become a marketing SVP for overhead projectors. The romance of big business captured Tim around age 7, when he'd join his dad on Saturdays for a drive to 3M's headquarters in St. Paul. 'It instilled upon me the importance of work ethic, because my father would be the only one there. I loved walking around staring at the big desks and big offices. I became fascinated by the prototypes for the newest 3M Thermo-Fax copying machines, and would copy their design in pencil,' he recalls. On the trip home, he'd quiz his father about 3M's organizational structure and workings of its chain of command. As a student at St. Olaf College near home, Cofer got his first job as the 'arms and legs' of a local research agency. He'd visit grocery stores, clipboard in hand, count the 'facings' of Honey Nut Cheerios, Lucky Charms, and other General Mills cereals on the shelves, and record the posted prices, at $2.85 an hour. 'I soon figured out that I didn't want to be recording the data, I wanted to be on the other side, using the data to build a brand,' he recalls. In 1992, he finished his MBA as valedictorian from the University of Minnesota's Carlson School of Management, majoring in marketing, and took a job in Minneapolis at Kraft Foods' cold-cuts purveyor Oscar Mayer. 'I was assistant brand manager for deli meats, maybe not the sexiest of jobs,' he avows. 'But I was brand passionate, and it was great foundational learning.' In 2003, Cofer got his first break when Kraft handed him his introductory general manager role, and control of his own P&L, as chief of the European chocolate franchise that marketed such feted brands as Milka and Toblerone. Cofer relocated to London and set about instituting a dramatic restructuring mandated by headquarters: shifting authority from country managers who previously exercised full control of their businesses to the 'regional' level led by Cofer, who took the new position as European VP of chocolate. 'This disempowered the country chiefs,' says Ingeborg Gasser-Kriss, Cofer's innovation chief for Europe. 'A newly formed region category team was not something the country heads wanted.' To win Gasser-Kriss's confidence, Cofer took her on a long walk, for a heart-to-heart talk, on Vienna's famed Ringstrasse encircling the city's historical center, rich in baroque architecture. That was followed by a tour visiting all two dozen country leaders, says Gasser-Kriss. 'Tim presented business plans to all of the country teams, and we had dinner with them. He told them, 'Look, I want us all to agree that if something doesn't touch the region as a whole, you'll have all the freedom you need. But if a decision has to be made at the region category, it goes with the region.' In 2010, Kraft CEO Irene Rosenfeld, Cofer's mentor, engineered the purchase of British chocolate-maker Cadbury for $19.6 billion in one of the largest food industry transactions ever. She immediately sent Cofer—whom she'd recalled from London in 2007 to first head Oscar Mayer then the Kraft pizza business—to Zurich, to oversee the integration of Kraft and Cadbury chocolate franchises worldwide. The Cadbury deal started as a hostile takeover. 'Cadbury was an icon of Britishness from the 1800s,' says Cofer. 'They fought the takeover in the business community and the court of public opinion.' Adds Gasser-Kriss, 'Cadbury's proud team called us 'the American plastic cheese company,' that's how much they liked us at the start.' Rosenfeld had promised big synergies between the two companies to justify the deal's high price. 'Tim had to navigate through rough waters, a lot of people were nervous,' says Rosenfeld. 'He had to tell people on both sides they didn't have jobs in the organization.' Once again, it was Cofer's expertise in tough-minded diplomacy that won the day. Essential to his success was an unlikely partnership he forged with the figure heading chocolate at Cadbury, Bharat Puri. 'Two more different people you couldn't imagine,' recalls Gasser-Kriss. 'Bharat was the life of the party, had a great sense of humor, and loved jokes. Tim was a brain person. On the continuum from sincerity to fun he was much on the sincerity side. One time he showed up at an all-day meeting unshaven, without a jacket and tie, and everybody applauded. Bharat told him, 'You need to relax!'' Gasser-Kriss greatly admired how Cofer put his deep analytical abilities to work when questioning herself and other lieutenants on their project proposals that needed his approval, sans intimidation. 'He would always put his finger on the weak spot,' and that made us better, she remembers. 'He was like a precision drone in spotting things that could go wrong.' This embedded content is not available in your region. Puri recalls that despite their odd-couple chasm in personality, he and Cofer joined hands on the right strategy for merging the best of both Kraft and Cadbury to create the powerhouse in chocolate that's thriving to this day under Mondelez. Puri, who's now managing director of Indian consumer and specialty chemicals outfit Pidilite, told Fortune that, at the start of their partnership, Cofer 'was too much head and not enough heart. He would tend to be formal and shy.' Gasser-Kriss credits the gregarious Puri with helping Cofer develop a bigger public persona. 'They learned new sets of behaviors from each other,' she says. 'It wasn't that Tim was introverted, but he developed an engaging, compelling manner in the town hall mode, and may owe that to Bharat's example.' For Gasser-Kriss, Cofer showed all and sundry his affection for his brands by naming his beloved Maltese Shih Tzu Toblerone. A stint in Asia troubleshooting Mondelez's business (and overseeing the wildly successful launch of Oreo Thins) and a return to the U.S. in 2017 as head of North America under Rosenfeld, then CEO at Mondelez, had Cofer set up as the leading internal candidate to succeed her. Instead, the board awarded the prize to Belgian executive Dirk Van de Put, who'd headed McCain Foods of Canada, the world's largest producer of frozen french fries and potato specialties. 'While I was disappointed, it turned out to be a learning experience working with Dirk,' he says. Inside Mondelez, Cofer created a venture capital group called SnackFutures that proved a forerunner to the stance he's taking at KDP. The new group backed quirky entrepreneurs to commercialize such innovations as vegan chocolates and plant-based cookies, and made Mondelez a preferred partner for young, hot brands on the rise, presaging Cofer's purchase of Ghost. To measure what tastes would sell, Cofer insisted on junking the old system that relied on questionnaires and focus groups. Instead, he deployed pop-up stands at schools and farmers' markets to conduct on-the-spot taste tests for moms dropping off their kids and health-conscious shoppers cruising the fruit and veggie booths. Most of all, Cofer claims that he benefited richly by watching the divergent styles of Rosenfeld and Van de Put. 'From them, I learned the importance of situational leadership,' he relates. 'With Dirk, it was the high-level attention to detail. Irene was a master of playing the strategic chessboard, who engineered the Cadbury acquisition, which paved the way for the split from Kraft. I was able to study both styles, and choose times when it's better to bring a high level of intensity, or to step back and examine the big strategic picture.' Away from the office, Cofer's a big tennis and skiing fan. In both sports, it's been both a family and a worldwide affair. Tim's two sons, now in their twenties, were captains of their high school tennis teams, and his wife, Jodi, is also an avid player. Cofer's approach on the court will probably surprise no one. 'I play aggressive,' he says. 'I play offense, not defense. I like to rush the net,' not recklessly, he avows, but behind deep, strong approach shots. Sitting on the baseline, hitting everything back, is the antithesis of Tim's game plan for walking off the winner. The family has visited each of the four Grand Slam tournaments in New York, Melbourne, Paris, and London. They have also globe-trotted on skis, taking to the slopes in places as far-flung as Sweden, Japan, and the Czech Republic. In music, Cofer loves classic rock—rap not so much—and his hero is fellow Minnesotan Bob Dylan, whose vinyl discs entranced him as a teen in the '70s, and whom he'll fly halfway across the U.S. to catch in concert. Cofer plays the showman big-time on his video series, Taste Test With Tim, posted on the KDP website. On the episodes running around eight minutes each, he and a guest—either an insider, usually a marketing or an R&D exec, or a KDP beverage partner—sample a new offering. On the shows, Cofer rhapsodizes like a coffee and soft drink sommelier, praising 'the toasted coconut notes and creamy notes' of Dr Pepper Creamy Coconut, or the 'clean, smooth finish' and 'caramel notes' found in a blend of Green Mountain Coffee. Cofer finished one entry by joyously recapping the KDP advertising mantra, 'Brew the Love,' exhorting, 'We're brewin' the love, baby!' In 1885—one year before the birth of Coca-Cola—a pharmacy operator in Waco, Texas, famously mixed 23 syrups from his adjoining soda fountain in an experiment to re-create the drugstore's aroma. The tangy blend was Dr Pepper. For many decades, the brand was chiefly a regional favorite in the Southwest. But in 1963, a pivotal legal decision declaring that Dr Pepper isn't a cola helped take it nationwide. That landmark ruling enabled Dr Pepper to win deals where the network of Coke 'Red' and Pepsi 'Blue' regional bottlers produced and distributed the brand in sundry markets. Over the years, Dr Pepper established its own 'Maroon' system of bottlers and distributors that now cover 80% of the U.S. But Dr Pepper is still blended and shipped by Coke and Pepsi franchises in many parts of the nation. A major advantage from KDP's continuing cooperation with the two behemoths: Dr Pepper is served in restaurants and fast-food outlets where either Coke or Pepsi are the exclusive offerings. McDonald's is Coke-only for cola, and Taco Bell is Pepsi only; diners can push the dark red Dr Pepper button at both. KDP's nameplate prospers greatly from its role as the leading sponsor of college football. This will be the seventh season it's been airing ads conjuring a fantasy suburb dubbed 'Fansville' whose twin obsessions are the college gridiron and Dr Pepper. Babies emerge from the womb wearing football jerseys and sports caps. Parents bawl out their kids for hiding soccer magazines under their mattresses. Retired football star turned actor Brian Bosworth plays a sheriff chugging Dr Pepper from a quart bottle. Cofer's so all in on 'Fansville' that in December he appeared on one of his Taste Test With Tim episodes shown on YouTube at the SEC championships festooned in a Dr Pepper–labeled football jersey, declaring, 'What's more classic than home-gating and tailgating!' The trend toward ever zanier mixtures entered a new dimension with an explosion in 'dirty soda.' Such beverages gained major traction in the Mormon community, where folks who are barred by their religion from drinking alcohol or hot drinks except herbal tea took to social media announcing that they were having great fun slurping these custom bubblies at drive-in chains Swig and Sonic. In the Hulu reality series The Secret Lives of Mormon Wives, which aired last year, the players lauded dirty soda forays as 'my Mormon crack' and 'kind of our vice.' A big hit at Swig: 'Naughty & Nice,' a swirling mix of Dr Pepper, English toffee syrup, and half-and-half. By 2023, videos of youngsters touting their outlandish dirty soda recipes abounded on TikTok and Instagram. And a top choice as a canvas for this explosion in wild culinary self-expression was Dr Pepper. First to pounce was KDP. 'We realized we were in a zeitgeist moment that offered a rare opportunity to capitalize on a new cultural idea,' says Cofer. The first step came in early 2024 when marketing people at KDP huddled with the folks at Nestlé promoting its nondairy creamer Coffee Mate. Together, they crafted the first mainstream product merging the worlds of coffee creamer and soda, a pairing that was all the rage across social media. Their brainchild was Dirty Soda Coconut Lime Flavor Liquid Creamer, featuring the Dr Pepper logo on the bottle headlined by 'Mix with.' 'I approved the idea right away,' says Cofer. In May 2024, KDP introduced the first mass-market dirty soft drink in a can, Dr Pepper Creamy Coconut, which proved to be KDP's most successful limited-time offering ever. On Feb. 5, KDP followed up by launching another new flavor, this one a perennial named Dr Pepper Blackberry, which, according to analyst Rattigan, is contributing to Dr Pepper's recent gains on Pepsi and Coke. But despite the surge, KDP's profitability lags well behind that of Coke and Pepsi. Accounting expert Jack Ciesielski uses a yardstick called Cash Operating Return on Assets to assess how well companies are deploying all the capital awarded them by shareholders, excluding the effects of taxes and leverage. Last year, Coke and Pepsi registered COROA of 11.5% and 13.1%, respectively. For KDP, the figure was a relatively undistinguished 5.3%. Still, that shortfall is an opportunity. Cofer points out that total refreshment drink volume nationwide grows around 1% annually, tracking population. The key to putting the fizz in earnings: achieving a richer mix—selling a higher portion of offerings that generate extra dollars per can and bottle. Hence, he's counting on the big move into the premium territory of energy, sports hydration, ready-to-drink coffee, and refreshers to lift margins, while deploying gridiron marketing and catchy new flavors in KDP's classic brands to grab share from rivals. And finally, he's betting that the launch of K-Rounds will invigorate the lagging coffee business. Unlike the K-Cups that encase the pre-brewed coffee in plastic capsules, K-Rounds are super-densely-packed mounds of ground beans that don't have packaging; they come in a plant-based coating. Folks will pop the K-Rounds into a new Keurig coffee maker called the Alta. 'Remember, Keurigs today are in 45 million homes. We're the preeminent system, but we're willing to reprogram ourselves to provide this totally new product,' Cofer intones. 'What's really exciting is that we're willing to disrupt ourselves.' For decades, Tim Cofer worked for established giants of consumer packaged goods. But as a leader he's proving himself to be the un-cola of CEOs—and the giants had better take note. This story was originally featured on
New York Post
22-05-2025
- Health
- New York Post
Doctors, former patients warn of LASIK eye surgery dangers: ‘Biggest scam ever put on the American public'
The suicide of a 26-year-old Pennsylvania police officer over the after-effects of the popular eye surgery LASIK was not an isolated incident, with others saying it left them with agonizing and life changing symptoms, patients and doctors told The Post. LASIK providers say the procedure is 95% to 99% safe, but one LASIK survivor said she had suicidal ideations for two years after her 'disastrous' surgery in 2000. She also claimed to know of at least 40 people to have taken their own lives because they couldn't take constant pain and vision problems, developed after the procedure. Advertisement 8 Ryan Kingerski, 26, died by suicide after undergoing LASIK surgery in 2024. Family Handout 8 Tim and Stefanie Kingerski said Ryan suffered headaches, double vision, seeing dark spots and floaters — tiny spots that appear as streaks or cobweb-like shapes across a person's field of vision — after LASIK surgery. CBS Pittsburgh 'I really didn't want to stick around at times, but I decided I would to get the word out about how dangerous this surgery can be,' Paula Cofer, 66, of Tampa, Fla., told The Post Wednesday. Advertisement 'The LASIK lobby and the surgeons will tell you only one percent of patients have issues afterward. That's not true. There are multiple studies that indicate otherwise. 'The percentage of those with poor outcomes are in the double digits, not one percent. And they know it,' she claimed. Since LASIK was approved by the Food and Drug Administration in 1999 over 10 million people in the US have undergone Laser Vision Correction, according to the medical journal Clinical Ophthalmology, which states between 700,000 and 800,000 people sign up for it each year. Cofer runs the Lasik Complications Support Group on Facebook, one of numerous organizations on social media which have sprung up in response to LASIK procedures gone wrong. Advertisement 8 Laser vision correction being carried out by a doctor. Vadim – 'If you understand Lasik and what it does to the eyes and cornea, you realize you can't do it on a healthy eye and not expect complications,' Cofer said. The procedure — Laser-Assisted In Situ Keratomileusis — reshapes the cornea of the eye. 'Not everyone has severe complications but a lot more people are suffering than you know. I got floaters, severe dry eyes, induced astigmatism and severe night vision problems,' said Cofer. Advertisement Ryan Kingerski, 26 — the cop who died by suicide after taking time off from the Penn Hills Police Department in Allegheny County, Penn. last August to undergo LASIK — had similar symptoms. His grieving parents, Tim and Stefanie Kingerski, told CBS News this week about the hell their son went through after the procedure. The Kingerskis said Ryan began suffering from headaches, double vision, seeing dark spots and floaters — tiny spots that appear as streaks or cobweb-like shapes across a person's field of vision, they said. 8 Paula Cofer, 66, started the Lasik Complications Support Group on Facebook to help others after suffering complications from her own procedure. Courtesy of Paula Cofer 8 Fox 2 Detroit meteorologist Jessica Starr took her own life and left a note and videos explaining it was because of the complications she suffered after undergoing LASIK surgery. Facebook Ryan's parents told a story similar to that of Detroit TV meteorologist Jessica Starr's widower, Dan Rose, who said she took her own life after struggling with intense eye pain and vision problems following laser eye surgery. The 35-year-old mother hanged herself on Dec. 12, 2018, just two months after undergoing LASIK to correct her vision. 'Prior to the procedure, Jessica was completely normal, very healthy,' Rose told WJBK in 2019. 'There was no depression … no underlying issue.' Advertisement Rose said his wife left behind a 30-page suicide note and videos, which made it clear the decision to end her life was because of the elective surgery. Morris Waxler, now 89, was an FDA advisor who headed the branch responsible for reviewing data on LASIK between 1996 and 2000, which covers the period it was approved. 8 A patient undergoing eye surgery mehmet – 8 Morris Waxler says he regrets approving the use of LASIK when he worked for the FDA and has been speaking out publicly about its dangers since 2010. Vadim – Advertisement It's a decision he told The Post he regrets — and has been speaking out publicly about LASIK's dangers since 2010. 'It didn't matter what questions and concerns I had, because the surgeons were very powerful and still are,' he claimed. Waxler has previously told CBS in 2019 his own analysis of industry data showed complication rates between 10% and 30% and in 2011, he petitioned the FDA to issue a voluntary recall of LASIK. 'People come in with healthy eyes and all they need is eyeglasses. But when surgeons cut the cornea they are removing nerves and leaving the corneas with odd shapes and some patients will have intractable pain,' he added. Advertisement The FDA warns on its website there are risks to undergoing LASIK including losing vision, glare, halos, and/or double vision and other 'debilitating visual symptoms'. However, The American Refractive Surgery Council says on its website: 'LASIK is safe and is one of the most studied elective surgical procedures available today … the rate of sight-threatening complications from LASIK eye surgery is estimated to be well below one percent.' 8 Dr. Edward Boshnick's practice is dedicated to restoring vision and comfort to people affected by eye conditions. He calls LASIK a 'BS procedure'. For Abraham Rutner, 43, a Brooklyn electrician, there was hope after his failed LASIK surgery five years ago. Advertisement 'It's like you have a layer of oil on top of your eye — it was so hazy and terrible,' Rutner told The Post. 'I couldn't work. I couldn't drive. I felt like I was still a young man and I lost my life.' Then he heard about 84-year-old Edward Boshnick, a Miami eye doctor whose optometric practice is dedicated to restoring vision and comfort lost due to a variety of eye conditions and surgeries, including LASIK, keratoconus and corneal trauma. Dr. Boshnick, whose website is called Eyefreedom, fitted Rutner with something called a scleral lens which fits over corneas damaged by LASIK. Paula Cofer also said she got fitted with the lens, which has helped her too. Boshnick told The Post 'Everyone has different problems when it comes to LASIK, and called it a 'BS procedure.' 'It's the biggest scam ever put on the American public,' he said. 'And it's a multi-billion dollar business.'
Yahoo
29-04-2025
- Business
- Yahoo
Ghost energy drinks drive sales boost at Keurig Dr Pepper
This story was originally published on Food Dive. To receive daily news and insights, subscribe to our free daily Food Dive newsletter. Keurig Dr Pepper's $1 billion-plus bet on Ghost energy drinks is beginning to pay off, helping boost sales at the beverage giant and offset headwinds in traditional segments like soda and coffee. Net refreshment beverage sales grew 11% in its most recent quarter. Keurig Dr Pepper's energy drink portfolio, which also includes a stake in C4, is driving momentum for the company, CEO Tim Cofer told investors on the company's earnings call. Coffee, where the company has a large presence with brands like Green Mountain and Lavazza, struggled in the quarter. Tariffs on green coffee beans and cautious consumer spending led to a 3.7% decline in the category, the executive said. Keurig Dr Pepper's portfolio consists of investments and outright ownership of drinks across the beverage spectrum, from sodas and teas to energy drinks and nonalcoholic beer. Its decision to lean harder into energy drinks in 2025 was bolstered by a C-suite shakeup earlier this year, when the company promoted insider Justin Whitmore to lead its operations in the growing category. The beverage company purchased 60% of Ghost last fall, and plans to fully acquire the brand in 2028. Keurig Dr Pepper said the brand's net sales quadrupled between 2021 and 2024. On its earnings call, the company said it is aggressively moving to boost distribution for Ghost's energy drinks, which include flavor collaborations with Mondelēz International-owned candy brands Sour Patch Kids and Swedish Fish. 'As we assume full influence over the brand all the way to the shelf, we are beginning to execute against Ghost's significant growth opportunities,' Jane Gelfand, senior vice president of finance, told investors. The company's investment in C4 Energy came in 2022 when it spent $863 million for a 30% stake in Nutrabolt, which owns the brand. Given the headwinds it's facing in coffee, Keurig Dr Pepper plans to lean into premium offerings from La Colombe and Lavazza, Cofer told investors. 'We will consider additional inflation mitigation steps in response to both green coffee and tariffs,' Cofer said. 'Additional pricing could be one of the levers, but there are others as well.' Other companies across the beverage industry are leaning into the growing energy drink category to drive revenue. Anheuser-Busch is launching an energy drink called Phorm Energy, and Molson Coors purchased a majority stake in Dwayne 'The Rock' Johnson's brand Zoa Energy. The U.S. energy drink category is projected to be worth $33 billion by 2030, according to Research and Markets data. Recommended Reading Keurig Dr Pepper to buy energy drink brand Ghost for more than $1B Sign in to access your portfolio
Zawya
02-04-2025
- Business
- Zawya
Dollar's record low FX reserves share not all bad news for Trump: McGeever
(The opinions expressed here are those of the author, a columnist for Reuters.) ORLANDO, Florida - In January, U.S. President Donald Trump warned the so-called BRICS nations against replacing, or backing any currency to take the place of, the "mighty U.S. dollar." While the International Monetary Fund's latest foreign exchange reserves data for the fourth quarter of last year suggests central banks around the world continue to pull away from the greenback, there may be a silver lining for the president. The IMF's Currency Composition of Official Foreign Exchange Reserves (Cofer) data, the gold standard for FX reserves information, show that countries have been gradually chipping away at their dollar holdings and diversifying for years. Indeed, the greenback's nominal share of official FX reserve holdings in the third quarter of last year fell to a record low 57.3% from over 72.0% in 2001. That crept up slightly to 57.8% in the fourth quarter, a rare rise, but the dollar surged 7.6% against a basket of major currencies in the period, its biggest quarterly appreciation in nearly a decade. All else equal, this reduces the dollar-value of reserves held in non-dollar currencies such as the euro, sterling, or Japanese yen. When adjusting for these FX changes, the dollar's share of reserves slid to a record low of 54.1% from 55.3%, according to Goldman Sachs. At the start of the millennium, that share was over 71%. Importantly, the Cofer figures only go up to December 31, so do not take into account any reserve shifts made amid the historically high policy uncertainty and market ructions of recent months. With military, diplomatic and trade ties going back decades now fraying at an alarming rate, reserve managers are bound to be rethinking their FX allocations. And that is unlikely to involve a sudden re-discovered love for the dollar. STILL NUMBER ONE Reserve managers do not typically make knee-jerk reactions to market gyrations or the headlines du jour. They're a cautious breed, prioritizing liquidity, stability and long-termism over yield, opportunity and a fast buck. But further diversification of their FX reserves can hardly be considered an impulsive reaction, as the trend is pretty well entrenched. The emergence of any new world order in the coming years would likely only strengthen it. No matter how you slice it, the dollar's overwhelming dominance in global FX reserves is weakening. But that doesn't mean the greenback's place as the world's preeminent reserve currency is under threat. Its share is not being eaten up by its nearest rival, the euro, but by a bunch of smaller, "nontraditional" reserve currencies such as the Korean won, Australian and Canadian dollars, and China's renminbi. "It's not just diversification out of the dollar. Euro reserve holdings have fallen in nominal and valuation-adjusted terms as well," notes Goldman's Michael Cahill. This is a trend that has been underway for years, taking hold just after the Global Financial Crisis and accelerating again after the pandemic. The Cofer data shows the aggregate share of "nontraditional" currencies in central banks' FX reserves was 12.6% in December, just off September's record high of 12.7%. Before 2009, that share had never exceeded 3%. The euro's share since its launch more than 25 years ago has never fallen below 19% and only once, in late 2020, has it exceeded 21%. Any reduction in the difference between the dollar and euro shares has been caused by reserve managers shunning the greenback rather than taking a shine to the euro. Their preference to build up holdings of several smaller currencies has created a somewhat curious equilibrium. The dollar is seeing its dominance gradually diminish, but it's in little danger of losing its role as the world's sole reserve currency. Trump, who seems to want the dollar to remain dominant while no longer sucking in so much of the world's savings, may be happy with that. (The opinions expressed here are those of the author, a columnist for Reuters.) (By Jamie McGeever;)
Reuters
01-04-2025
- Business
- Reuters
Dollar's record low FX reserves share not all bad news for Trump: McGeever
ORLANDO, Florida, April 1 (Reuters) - In January, U.S. President Donald Trump warned the so-called BRICS nations against replacing, or backing any currency to take the place of, the "mighty U.S. dollar." While the International Monetary Fund's latest foreign exchange reserves data for the fourth quarter of last year suggests central banks around the world continue to pull away from the greenback, there may be a silver lining for the president. The IMF's Currency Composition of Official Foreign Exchange Reserves (Cofer) data, the gold standard for FX reserves information, show that countries have been gradually chipping away at their dollar holdings and diversifying for years. Indeed, the greenback's nominal share of official FX reserve holdings in the third quarter of last year fell to a record low 57.3% from over 72.0% in 2001. That crept up slightly to 57.8% in the fourth quarter, a rare rise, but the dollar surged 7.6% against a basket of major currencies in the period, its biggest quarterly appreciation in nearly a decade. All else equal, this reduces the dollar-value of reserves held in non-dollar currencies such as the euro, sterling, or Japanese yen. When adjusting for these FX changes, the dollar's share of reserves slid to a record low of 54.1% from 55.3%, according to Goldman Sachs. At the start of the millennium, that share was over 71%. Importantly, the Cofer figures only go up to December 31, so do not take into account any reserve shifts made amid the historically high policy uncertainty and market ructions of recent months. With military, diplomatic and trade ties going back decades now fraying at an alarming rate, reserve managers are bound to be rethinking their FX allocations. And that is unlikely to involve a sudden re-discovered love for the dollar. STILL NUMBER ONE Reserve managers do not typically make knee-jerk reactions to market gyrations or the headlines du jour. They're a cautious breed, prioritizing liquidity, stability and long-termism over yield, opportunity and a fast buck. But further diversification of their FX reserves can hardly be considered an impulsive reaction, as the trend is pretty well entrenched. The emergence of any new world order in the coming years would likely only strengthen it. No matter how you slice it, the dollar's overwhelming dominance in global FX reserves is weakening. But that doesn't mean the greenback's place as the world's preeminent reserve currency is under threat. Its share is not being eaten up by its nearest rival, the euro, but by a bunch of smaller, "nontraditional" reserve currencies such as the Korean won, Australian and Canadian dollars, and China's renminbi. "It's not just diversification out of the dollar. Euro reserve holdings have fallen in nominal and valuation-adjusted terms as well," notes Goldman's Michael Cahill. This is a trend that has been underway for years, taking hold just after the Global Financial Crisis and accelerating again after the pandemic. The Cofer data shows the aggregate share of "nontraditional" currencies in central banks' FX reserves was 12.6% in December, just off September's record high of 12.7%. Before 2009, that share had never exceeded 3%. The euro's share since its launch more than 25 years ago has never fallen below 19% and only once, in late 2020, has it exceeded 21%. Any reduction in the difference between the dollar and euro shares has been caused by reserve managers shunning the greenback rather than taking a shine to the euro. Their preference to build up holdings of several smaller currencies has created a somewhat curious equilibrium. The dollar is seeing its dominance gradually diminish, but it's in little danger of losing its role as the world's sole reserve currency. Trump, who seems to want the dollar to remain dominant while no longer sucking in so much of the world's savings, may be happy with that. (The opinions expressed here are those of the author, a columnist for Reuters.) By Jamie McGeever;
