In re KEURIG DR PEPPER INC.

 
UNITED STATES OF AMERICA 
Before the 
SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 100983 / September 10, 2024 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-22100 
 
In the Matter of 
 
KEURIG DR PEPPER INC., 
 
Respondent. 
 
ORDER INSTITUTING CEASE-AND-
DESIST PROCEEDINGS PURSUANT TO 
SECTION 21C OF THE SECURITIES 
EXCHANGE ACT OF 1934, MAKING 
FINDINGS, AND IMPOSING A CEASE-
AND-DESIST ORDER  
  
 
I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-
and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities 
Exchange Act of 1934 (“Exchange Act”), against Keurig Dr Pepper Inc. (“Keurig” or 
“Respondent”).   
 
II. 
 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept. Solely for the purpose 
of these proceedings and any other proceedings brought by or on behalf of the Commission, or to 
which the Commission is a party, and without admitting or denying the findings herein, except as 
to the Commission’s jurisdiction over it and the subject matter of these proceedings, which are 
admitted, Respondent consents to the entry of this Order Instituting Cease-and-Desist Proceedings 
Pursuant to Section 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a 
Cease-and-Desist Order (“Order”), as set forth below.   
 
III. 
 
 On the basis of this Order and Respondent’s Offer, the Commission finds that:  
 
 
 
 
 
 

2 
 
SUMMARY 
 
1.  This matter involves statements made by Keurig in its annual reports filed with the 
Commission for fiscal years 2019 and 2020 regarding the recyclability of its K-Cup beverage pods 
(“pods”) used to make coffee and other beverages in Keurig’s single-serve brewing systems. 
 
2.  Beginning in or around 2016, Keurig performed tests of its pods at various 
recycling facilities, in which Keurig tracked the progress of pods throughout the recycling 
facilities. Keurig also sought and received feedback from recycling industry participants, including 
the recycling companies involved in the testing, concerning curbside recycling of pods. While the 
testing demonstrated that pods typically could be successfully sorted from other materials at an 
early stage of the process within the recycling facilities, two large recycling companies provided 
negative feedback concerning the commercial feasibility of curbside recycling of pods at that time. 
However, in Keurig’s annual reports filed with the Commission for fiscal years 2019 and 2020, 
Keurig stated, without qualification, that its testing with recycling facilities “validate[d] that [pods] 
can be effectively recycled” and did not disclose that two large recycling companies had indicated 
that they did not presently intend to accept pods for recycling. By not including this additional 
information, Keurig’s statements about the conclusion to be drawn from the testing concerning 
recyclability of pods were incomplete and therefore inaccurate. 
 
3.  As a result of the conduct described above, Keurig violated Section 13(a) of the 
Exchange Act and Rule 13a-1 thereunder. 
 
RESPONDENT 
 
4. Keurig Dr Pepper Inc., a Delaware corporation based in Burlington, 
Massachusetts, and Frisco, Texas, is a beverage company and producer of single-serve brewing 
systems. Keurig’s stock is registered under Section 12(b) of the Exchange Act and trades on 
NASDAQ. 
 
FACTS 
 
 5. In 2014, Keurig Green Mountain Inc. (“Keurig Green Mountain”), now a subsidiary 
of Keurig, released its Sustainability Report, announcing certain sustainability goals, one of which 
was to make 100% of pods that it manufactured recyclable by 2020. 
 
 6. In fiscal year 2019, sales of pods comprised a significant percentage of net sales 
of Keurig’s coffee systems business segment, and the coffee systems business segment 
represented a significant percentage of Keurig’s net sales across all of its business segments. 
Consumer research conducted by Keurig Green Mountain in 2016 indicated that, for certain 
consumers, environmental concerns were a significant factor, among others, considered when 
deciding whether to purchase a Keurig brewing system. 
 

3 
 
 7.  Keurig Green Mountain researched options for changes that could be made to its 
pods to achieve its goal of making pods recyclable.  Following this research, Keurig determined 
that pods made of polypropylene number 5 plastic (“PP5”), sold in packaging with certain specific 
consumer recycling instructions, would achieve this goal. 
 
 8. According to Keurig, all pods that it manufactured for sale in the United States and 
Canada were made of PP5 by the end of 2020. 
 
 9.  In part to address concerns in the recycling industry that small items, like its pods, 
could not be processed and recycled at recycling facilities, Keurig Green Mountain performed tests 
at various recycling facilities in the United States and Canada beginning in 2016. These tests 
involved using radio frequency identification readers at various points in the recycling process to 
follow the movement of pods tagged with a tracking chip. These tests enabled Keurig to track the 
flow of pods through the facility, including the ultimate destination of pods, and assess whether 
pods were processed and sorted correctly at the various recycling facilities. These tests reflected 
that pods typically could be successfully sorted from other materials to make it to a stage of the 
recycling process from which items have the potential to be sorted into groups of various materials 
for purchase by parties who might further process the materials for their potential reuse.  
 
 10. After Keurig completed its testing, two recycling companies involved in the testing 
nonetheless conveyed significant negative feedback to Keurig regarding the commercial feasibility 
of curbside recycling of pods at that time. For example, one recycling company wrote to Keurig: 
“Currently, there simply is not a sufficient benefit for small format materials, and/or hard-to-
recycle materials – including K-Cup pods – to make the financial case for inclusion as part of 
curbside recycling programs.” The recycling companies also indicated to Keurig that they did not 
presently intend to accept pods at their own recycling facilities.   
 
 11. The two recycling companies that provided negative feedback to Keurig are among 
the nation’s largest recycling companies, operating more than one-third of recycling facilities in the 
United States. An internal Keurig document described one such recycling company as “one of the 
largest and newest [recycling companies] in the country” with “high tech machinery that is able to 
sort items well.” 
 
 12. Notwithstanding this negative feedback, in Keurig’s Form 10-K for the fiscal year 
ended December 31, 2019, filed with the Commission on February 27, 2020, Keurig stated: “we 
have conducted extensive testing with municipal recycling facilities to validate that [pods] can be 
effectively recycled.”  
 
 13. Similarly, in Keurig’s Form 10-K for the fiscal year ended December 31, 2020, 
filed with the Commission on February 25, 2021, Keurig stated: “we have conducted extensive 
testing with municipal recycling facilities to validate that [pods] can be effectively recycled. We 
continue to engage with municipalities and recycling facilities to advance the quantity and quality 
of recycled polypropylene and have committed $10 million toward the advancement of 
polypropylene recycling in the U.S. through the Polypropylene Recycling Coalition, an effort led 

4 
 
by The Recycling Partnership and funded by leading brands, recyclers, converters and producers of 
polypropylene.”  
 
 14. Keurig’s statements in these Forms 10-K that its recyclability testing had validated 
that pods could be “effectively recycled” were incomplete and inaccurate because they did not also 
disclose the negative feedback received from recycling companies involved in the testing 
concerning the recyclability of pods.   
 
 15.   Keurig’s subsequent Forms 10-K, starting with the Form 10-K for the year ended 
December 31, 2021, filed with the Commission on February 24, 2022, did not contain any 
discussion of its recyclability testing.    
 
VIOLATIONS 
 
16. As a result of the conduct described above, Keurig violated Section 13(a) of the 
Exchange Act and Rule 13a-1 thereunder, which, among other things, require every issuer of a 
security registered pursuant to Section 12 of the Exchange Act to file with the Commission 
complete and accurate annual reports.  
 
IV. 
 
 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 
agreed to in Respondent’s Offer. 
 
 Accordingly, it is hereby ORDERED that: 
 
 A. Pursuant to Section 21C of the Exchange Act, Respondent Keurig cease and desist 
from committing or causing any violations and any future violations of Section 13(a) of the 
Exchange Act and Rule 13a-1 thereunder.  
  
B. Keurig shall, within 14 days of the entry of this Order, pay a civil money penalty in 
the amount of $1,500,000 to the Securities and Exchange Commission for transfer to the general 
fund of the United States Treasury, subject to Exchange Act Section 21F(g)(3). If timely payment 
is not made, additional interest shall accrue pursuant to 31 U.S.C. §3717.   
 
Payment must be made in one of the following ways:   
 
(1) Respondent may transmit payment electronically to the Commission, which 
will provide detailed ACH transfer/Fedwire instructions upon request;  
 
(2) Respondent may make direct payment from a bank account via Pay.gov 
through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  
 

5 
 
(3) Respondent may pay by certified check, bank cashier’s check, or United 
States postal money order, made payable to the Securities and Exchange 
Commission and hand-delivered or mailed to:  
 
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
 
Payments by check or money order must be accompanied by a cover letter identifying 
Keurig Dr Pepper Inc. as a Respondent in these proceedings, and the file number of these 
proceedings; a copy of the cover letter and check or money order must be sent to John Dugan, 
Associate Director, Division of Enforcement, Securities and Exchange Commission, 33 Arch 
Street, 24
th
 Floor, Boston, MA 02110.   
 
 C. Amounts ordered to be paid as civil money penalties pursuant to this Order shall be 
treated as penalties paid to the government for all purposes, including all tax purposes.  To 
preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 
Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 
award of compensatory damages by the amount of any part of Respondent’s payment of a civil 
penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants such a 
Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order granting 
the Penalty Offset, notify the Commission’s counsel in this action and pay the amount of the 
Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be deemed 
an additional civil penalty and shall not be deemed to change the amount of the civil penalty 
imposed in this proceeding.  For purposes of this paragraph, a “Related Investor Action” means a 
private damages action brought against Respondent by or on behalf of one or more investors based 
on substantially the same facts as alleged in the Order instituted by the Commission in this 
proceeding. 
 
 
 By the Commission. 
 
 
 
Vanessa A. Countryman 
Secretary 
 
 

UNITED STATES OF AMERICA 

Before the 

SECURITIES AND EXCHANGE COMMISSION 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 100983 / September 10, 2024 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-22100 

 

In the Matter of 

 

KEURIG DR PEPPER INC., 

 

Respondent. 

 

ORDER INSTITUTING CEASE-AND-

DESIST PROCEEDINGS PURSUANT TO 

SECTION 21C OF THE SECURITIES 

EXCHANGE ACT OF 1934, MAKING 

FINDINGS, AND IMPOSING A CEASE-

AND-DESIST ORDER  

  

 

I. 

 

 The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-

and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities 

Exchange Act of 1934 (“Exchange Act”), against Keurig Dr Pepper Inc. (“Keurig” or 

“Respondent”).   

 

II. 

 

 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (the “Offer”) which the Commission has determined to accept. Solely for the purpose 

of these proceedings and any other proceedings brought by or on behalf of the Commission, or to 

which the Commission is a party, and without admitting or denying the findings herein, except as 

to the Commission’s jurisdiction over it and the subject matter of these proceedings, which are 

admitted, Respondent consents to the entry of this Order Instituting Cease-and-Desist Proceedings 

Pursuant to Section 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a 

Cease-and-Desist Order (“Order”), as set forth below.   

 

III. 

 

 On the basis of this Order and Respondent’s Offer, the Commission finds that:  

 

 

 

 

 

 



2 

 

SUMMARY 

 

1.  This matter involves statements made by Keurig in its annual reports filed with the 

Commission for fiscal years 2019 and 2020 regarding the recyclability of its K-Cup beverage pods 

(“pods”) used to make coffee and other beverages in Keurig’s single-serve brewing systems. 

 

2.  Beginning in or around 2016, Keurig performed tests of its pods at various 

recycling facilities, in which Keurig tracked the progress of pods throughout the recycling 

facilities. Keurig also sought and received feedback from recycling industry participants, including 

the recycling companies involved in the testing, concerning curbside recycling of pods. While the 

testing demonstrated that pods typically could be successfully sorted from other materials at an 

early stage of the process within the recycling facilities, two large recycling companies provided 

negative feedback concerning the commercial feasibility of curbside recycling of pods at that time. 

However, in Keurig’s annual reports filed with the Commission for fiscal years 2019 and 2020, 

Keurig stated, without qualification, that its testing with recycling facilities “validate[d] that [pods] 

can be effectively recycled” and did not disclose that two large recycling companies had indicated 

that they did not presently intend to accept pods for recycling. By not including this additional 

information, Keurig’s statements about the conclusion to be drawn from the testing concerning 

recyclability of pods were incomplete and therefore inaccurate. 

 

3.  As a result of the conduct described above, Keurig violated Section 13(a) of the 

Exchange Act and Rule 13a-1 thereunder. 

 

RESPONDENT 

 

4. Keurig Dr Pepper Inc., a Delaware corporation based in Burlington, 

Massachusetts, and Frisco, Texas, is a beverage company and producer of single-serve brewing 

systems. Keurig’s stock is registered under Section 12(b) of the Exchange Act and trades on 

NASDAQ. 

 

FACTS 

 

 5. In 2014, Keurig Green Mountain Inc. (“Keurig Green Mountain”), now a subsidiary 

of Keurig, released its Sustainability Report, announcing certain sustainability goals, one of which 

was to make 100% of pods that it manufactured recyclable by 2020. 

 

 6. In fiscal year 2019, sales of pods comprised a significant percentage of net sales 

of Keurig’s coffee systems business segment, and the coffee systems business segment 

represented a significant percentage of Keurig’s net sales across all of its business segments. 

Consumer research conducted by Keurig Green Mountain in 2016 indicated that, for certain 

consumers, environmental concerns were a significant factor, among others, considered when 

deciding whether to purchase a Keurig brewing system. 

 



3 

 

 7.  Keurig Green Mountain researched options for changes that could be made to its 

pods to achieve its goal of making pods recyclable.  Following this research, Keurig determined 

that pods made of polypropylene number 5 plastic (“PP5”), sold in packaging with certain specific 

consumer recycling instructions, would achieve this goal. 

 

 8. According to Keurig, all pods that it manufactured for sale in the United States and 

Canada were made of PP5 by the end of 2020. 

 

 9.  In part to address concerns in the recycling industry that small items, like its pods, 

could not be processed and recycled at recycling facilities, Keurig Green Mountain performed tests 

at various recycling facilities in the United States and Canada beginning in 2016. These tests 

involved using radio frequency identification readers at various points in the recycling process to 

follow the movement of pods tagged with a tracking chip. These tests enabled Keurig to track the 

flow of pods through the facility, including the ultimate destination of pods, and assess whether 

pods were processed and sorted correctly at the various recycling facilities. These tests reflected 

that pods typically could be successfully sorted from other materials to make it to a stage of the 

recycling process from which items have the potential to be sorted into groups of various materials 

for purchase by parties who might further process the materials for their potential reuse.  

 

 10. After Keurig completed its testing, two recycling companies involved in the testing 

nonetheless conveyed significant negative feedback to Keurig regarding the commercial feasibility 

of curbside recycling of pods at that time. For example, one recycling company wrote to Keurig: 

“Currently, there simply is not a sufficient benefit for small format materials, and/or hard-to-

recycle materials – including K-Cup pods – to make the financial case for inclusion as part of 

curbside recycling programs.” The recycling companies also indicated to Keurig that they did not 

presently intend to accept pods at their own recycling facilities.   

 

 11. The two recycling companies that provided negative feedback to Keurig are among 

the nation’s largest recycling companies, operating more than one-third of recycling facilities in the 

United States. An internal Keurig document described one such recycling company as “one of the 

largest and newest [recycling companies] in the country” with “high tech machinery that is able to 

sort items well.” 

 

 12. Notwithstanding this negative feedback, in Keurig’s Form 10-K for the fiscal year 

ended December 31, 2019, filed with the Commission on February 27, 2020, Keurig stated: “we 

have conducted extensive testing with municipal recycling facilities to validate that [pods] can be 

effectively recycled.”  

 

 13. Similarly, in Keurig’s Form 10-K for the fiscal year ended December 31, 2020, 

filed with the Commission on February 25, 2021, Keurig stated: “we have conducted extensive 

testing with municipal recycling facilities to validate that [pods] can be effectively recycled. We 

continue to engage with municipalities and recycling facilities to advance the quantity and quality 

of recycled polypropylene and have committed $10 million toward the advancement of 

polypropylene recycling in the U.S. through the Polypropylene Recycling Coalition, an effort led 



4 

 

by The Recycling Partnership and funded by leading brands, recyclers, converters and producers of 

polypropylene.”  

 

 14. Keurig’s statements in these Forms 10-K that its recyclability testing had validated 

that pods could be “effectively recycled” were incomplete and inaccurate because they did not also 

disclose the negative feedback received from recycling companies involved in the testing 

concerning the recyclability of pods.   

 

 15.   Keurig’s subsequent Forms 10-K, starting with the Form 10-K for the year ended 

December 31, 2021, filed with the Commission on February 24, 2022, did not contain any 

discussion of its recyclability testing.    

 

VIOLATIONS 

 

16. As a result of the conduct described above, Keurig violated Section 13(a) of the 

Exchange Act and Rule 13a-1 thereunder, which, among other things, require every issuer of a 

security registered pursuant to Section 12 of the Exchange Act to file with the Commission 

complete and accurate annual reports.  

 

IV. 

 

 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 

agreed to in Respondent’s Offer. 

 

 Accordingly, it is hereby ORDERED that: 

 

 A. Pursuant to Section 21C of the Exchange Act, Respondent Keurig cease and desist 

from committing or causing any violations and any future violations of Section 13(a) of the 

Exchange Act and Rule 13a-1 thereunder.  

  

B. Keurig shall, within 14 days of the entry of this Order, pay a civil money penalty in 

the amount of $1,500,000 to the Securities and Exchange Commission for transfer to the general 

fund of the United States Treasury, subject to Exchange Act Section 21F(g)(3). If timely payment 

is not made, additional interest shall accrue pursuant to 31 U.S.C. §3717.   

 

Payment must be made in one of the following ways:   

 

(1) Respondent may transmit payment electronically to the Commission, which 

will provide detailed ACH transfer/Fedwire instructions upon request;  

 

(2) Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  

 

http://www.sec.gov/about/offices/ofm.htm


5 

 

(3) Respondent may pay by certified check, bank cashier’s check, or United 

States postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to:  

 

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

 

Payments by check or money order must be accompanied by a cover letter identifying 

Keurig Dr Pepper Inc. as a Respondent in these proceedings, and the file number of these 

proceedings; a copy of the cover letter and check or money order must be sent to John Dugan, 

Associate Director, Division of Enforcement, Securities and Exchange Commission, 33 Arch 

Street, 24th Floor, Boston, MA 02110.   

 

 C. Amounts ordered to be paid as civil money penalties pursuant to this Order shall be 

treated as penalties paid to the government for all purposes, including all tax purposes.  To 

preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 

Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 

award of compensatory damages by the amount of any part of Respondent’s payment of a civil 

penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants such a 

Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order granting 

the Penalty Offset, notify the Commission’s counsel in this action and pay the amount of the 

Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be deemed 

an additional civil penalty and shall not be deemed to change the amount of the civil penalty 

imposed in this proceeding.  For purposes of this paragraph, a “Related Investor Action” means a 

private damages action brought against Respondent by or on behalf of one or more investors based 

on substantially the same facts as alleged in the Order instituted by the Commission in this 

proceeding. 

 

 

 By the Commission. 

 

 

 

Vanessa A. Countryman 

Secretary 

 

 


	UNITED STATES OF AMERICA
	IV.