Chobani has paid $900 million to acquire coffee roaster and retailer La Colombe, the company announced today, a move that sees Keurig Dr Pepper, a minority investor in La Colombe, become an equity stakeholder in the yogurt and dairy company.
La Colombe will continue to operate as an independent brand, an approach that “allows for collaboration and knowledge sharing between the two companies while preserving the unique identity and innovation that La Colombe is known for.”
“At a time where the industry has faced challenges to grow sales, Chobani has delivered double-digit, volume-led sales growth, and considerable margin expansion. We have never been stronger or better positioned to chart our next chapter of growth,” said Chobani Founder and Chief Executive Officer Hamdi Ulukaya in a press release.
“We’ve already made an investment in the coffee category with our creamers and are excited about bringing La Colombe into the Chobani family, and offering the delicious, high-quality cold brew and ready-to-drink craftmanship of La Colombe to a next generation of consumers, powered by a strong distribution partner in KDP.”
“La Colombe is a unique brand and well positioned to continue its strong growth trajectory, including upside as its ready-to-drink line expands availability through our Company-owned DSD network and with premium K-Cup® pods now in the market,” said, KDP Chairman and CEO Bob Gamgort. “Both as a strategic partner and a minority shareholder, we are excited by the path ahead.”
Chobani is also expected to “enhance La Colombe’s procurement practices, deliver meaningful cost synergies, and elevate its overall operational performance.”
Why does this make sense?
For one, the relationships are already built: Chobani founder Hamdi Ulukaya joined La Colombe as its sole investor back in 2015, and the coffee roaster had for years quietly been Chobani’s supplier for its since-discontinued cold brew products.
But the crown jewel for La Colombe — which operates its own cafes, sells coffee at retail stores and is a major foodservice supplier — is its RTD business, which stretches across single-serve cans and refrigerated multiserve formats and is backed by a $300 million distribution pact with Keurig Dr Pepper, the coffee maker’s second largest shareholder (33.3%). Part of that money was earmarked to “pay off debt,” an issue that now appears moot.
After a prodigious period of innovation, Chobani also seems to be narrowing its focus on specific high-growth areas, such as coffee, and pulling away from others, like ultra-filtered dairy milk. It also means officially welcoming one of legacy CPG’s big players to the cap table: with KDP converting its La Colombe shares to Chobani, the soda giant now has a presence in multiple refrigerated categories including yogurt and coffee creamers. Could bigger synergies be in play? Also, will the additional revenue from La Colombe help Ulukaya finally pull off his long-wished-for Chobani IPO?
As for today, it’s way too early to know what the convergence of these three brands will actually mean; per the announcement, La Colombe will continue to operate as an independent entity, and the KDP agreement means there shouldn’t be any hiccups in distribution during the corporate transition.