Westrock Coffee is expanding its already ambitious strategic vision for ready-to-drink, announcing yesterday an agreement with Texas-based Select Milk Producers to create a joint venture for dairy or plant-based milk coffee-based beverages.
The collaboration was affirmed in a letter of intent between the two companies, which detailed plans for the construction and operation of extended shelf-life and aseptic multi-serve bottle lines inside a new manufacturing facility Select Milk intends to build in Littlefield, Texas, set to go online in Q1 2026.
Dallas-based Select Milk is a major milk processor in the Southwest and Midwest, and is the owner or joint venture partner in eight plants. The company was an original partner with The Coca-Cola Company in fluid dairy brand Fairlife before being bought out in 2020.
The new plant will produce drinks made with coffee extracts and concentrates supplied from Westrock’s 524,000 square foot, $300 million facility in Conway, Arkansas, the centerpiece of the family-run company’s plan to dominate the liquid format. The Conway site is set to go online this spring, but is already getting an upgrade.
“As we near completion of the Extract and RTD facility in Conway, Arkansas, we made the decision to expand our extract and concentration capabilities so that as we add additional lines in the future, we can do so without having to impact the existing operations of the facility,” said Westrock Coffee’s CEO and Co-Founder, Scott Ford, in a statement.
“In addition, we have expanded our multi-serve bottle capacities by adding cold-chain capability to our facility. Together, these additions better position us to respond to existing customer demand for extended shelf life (“ESL”) and multi-serve bottles and ensure we can grow our capabilities in the future without disrupting operations.”
As detailed in the most recent edition of BevNET Magazine, Westrock has made deep investments in its RTD strategy that have dampened recent quarterly earnings, with management promising short-term pain will translate to long-term gains before the facility has even officially opened.
Westrock is funding both the Select Milk joint venture and the Conway expansion by issuing $72 million in convertible senior unsecured notes (bearing 5% annual interest) due 2029 in a private offering. The notes are convertible into shares of common stock in certain circumstances and during certain periods at a conversion price of $12.84 per share, subject to adjustment.
The company is scheduled to report its full-year 2023 results on March 12, after market close.