BURLINGTON, MASS. — Keurig Dr Pepper’s (KDP) three-prong strategy that guides its US Refreshment Beverages business unit propelled the company during the first quarter of fiscal 2023. Unit sales for the quarter rose 12.7% to $2.01 billion and compared favorably to the year prior when unit sales were $1.78 billion.

Price increases generated 12.5% of the sales growth while volume/mix growth was 0.2%. US Refreshment Beverages operating income fell 30% to $490 million from $704 million the year before. Items affecting comparability included a gain on litigation in 2022 related to KDP’s distribution agreement with Body Armor.

“We create value in US Refreshment Beverages in three ways — by driving growth in core brands through marketing and brand renovation, by filling portfolio white spaces via innovation and external partnerships, and by enhancing the effectiveness of our omnichannel selling and distribution system, including our company-owned direct-store delivery system,” said Robert M. Gamgort, chairman and chief executive officer, during an April 27 conference call with securities analysts. “The multiplier effect of all three of these elements working in unison was evident in Q1.”

Brands such as Dr Pepper, Crush and Mott’s performed well during the quarter and the company is in the process of integrating Nutrabolt’s C4 Energy beverage into its distribution network. Keurig Dr Pepper acquired a minority stake in Nutrabolt in December.   

“Our execution thus far has been smooth and is progressing in line with our plans,” Mr. Gamgort said. “As we begin to invest behind the brand, we are securing incremental distribution points and display as well as upgrading placements.”

Net income for the quarter ended March 31 fell 20% to $467 million, equal to 33¢ per share on the common stock, from $585 million, or 41¢ per share.

Quarterly sales rose 9% to $3.35 billion from $3.07 billion.

US Coffee business unit sales fell 1.3% during the quarter to $931 million from $943 million. Price increases generated 5.3% of sales but was offset by a 6.6% decline in volume/mix, according to the company.

“This segment experienced a slower start to the year,” Mr. Gamgort said. “Growth rates in the at-home coffee category, including the single-serve segment are being temporarily impacted by changes in mobility relative to the prior year. In Q1, the category lapped the surge of the omicron variant and lingering pandemic precautions in the year-ago period are expected to continue to affect comparisons through the first half.”

Business unit operating income fell 9% to $232 million from $255 million during the first quarter of fiscal 2022. Keurig brewer shipments fell 29% during the quarter.

Pod sales in the United States rose 2.9% during the quarter and volumes declined 2%. In addition to increased consumer mobility, Sudhanshu Shekhar Priyadarshi, chief financial officer, said price elasticity pushed some consumers to shift from premium pods to private label.