Chobani enters RTD coffee category with $900m acquisition of La Colombe
US coffee roaster La Colombe currently operates in multiple channels, including retail, cafes, foodservice, and direct-to-consumer. The brand positions itself as the only ready-to-drink ("RTD") coffee company that owns its supply chain from bean sourcing to roasting, allowing it to promote ethical trading standards.
The company has seen its RTD line triple in size over the last five years: with further growth in this category predicted in the coming years.
Along with the distribution muscle of Keurig Dr Pepper (which has a 33% stake in La Colombe), Chobani says it can expand the reach and potential of the La Colombe coffee brand.
RTD coffee is 'highly complementary' to Chobani's modern food portfolio
Having launched its ‘natural and accessible’ Greek yogurt in 2007, Chobani shot to success and became the best-selling yogurt in the US in 2011. It’s now passed $2bn in sales and is growing 20-25% YoY, according to founder and CEO Hamdi Ulakya.
In 2019 it started expanding beyond its yogurt stronghold with the launch of Chobani Oatmilk and Chobani coffee creamer. Now, it sees La Colombe as a growing player in the fast-growing $5bn US RTD coffee category.
"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 Ulukaya as the company announced the acquisition on Friday.
"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."
As part of Chobani, La Colombe will continue to operate as an independent brand: ‘allowing for collaboration and knowledge sharing between the two companies while preserving the unique identity and innovation that La Colombe is known for’.
The acquisition will see La Colombe benefit from Chobani’s retail execution, marketing and cold chain capabilities and access underdeveloped channels such as convenience retail.
“Beyond plans to unlock La Colombe's true sales potential, Chobani will also enhance La Colombe's procurement practices, deliver meaningful cost synergies, and elevate its overall operational performance,” says a statement from the companies. “In addition, given cultural alignment and shared values, La Colombe will play a key role in the Company's ongoing journey to doing good and making the world a healthier place.”
Molson Coors, KDP and Chobani
In 2021, Molson Coors started distributing La Colombe’s speciality RTD coffee products in convenience, drug and certain big-box stories. In March, however, the two companies agreed to end the distribution agreement: with La Colombe seeking to consolidate distribution of its RTD operations with other products (such as bagged coffee and cold brew coffee multi-serves).
In July, Keurig Dr Pepper took a 33% ownership stake in La Colombe for $300m, making it the second largest investor in the brand. This included a long-term sales and distribution agreement for La Colombe RTD coffee and a long-term licensing, manufacturing and distribution agreement for La Colombe branded K-Cup coffee pods (which recently launched onto the market).
"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 as the acquisition was announced (the La Colombe K-Cup pods launched earlier this month).
"Both as a strategic partner and a minority shareholder, we are excited by the path ahead."
