Chobani, the renowned food and beverage group recognized for its Greek-style yogurt, has acquired La Colombe, the coffee business based in the United States.
The agreement, valued at $900 million, brings together two assets under the control of Hamdi Ulukaya.
Chobani’s founder and CEO, Hamdi Ulukaya, established the yogurt maker in 2005. In 2015, he invested in La Colombe, a coffee business founded in 1994.
As part of the deal, Keurig Dr Pepper, the major US coffee company, will exchange its ownership in La Colombe for an undisclosed stake in Chobani.
Having become La Colombe’s distributor earlier this year through an investment in the Philadelphia-based business, Keurig Dr Pepper will maintain its role in handling the company’s products.
“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,” Ulukaya said, without citing figures.
“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.”
Under the terms of the announced deal, Chobani has financed the acquisition with a newly issued $550 million loan, cash, and the exchange of Keurig Dr Pepper’s stake in La Colombe.
Earlier this year, the owner of Keurig coffee invested $300 million for a 33% stake in La Colombe, thereby becoming its second-largest investor after majority shareholder Ulukaya. In addition to marketing ready-to-drink (RTD) and pod coffee products, La Colombe operates on-premise sites in New York, Texas, Chicago, California, Maryland, and Philadelphia.
Bob Gamgort, the Chairman and CEO of Keurig Dr Pepper, who is scheduled to step down as CEO next year, highlighted the growth potential he envisions for La Colombe.
“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 [direct-store distribution] network and with premium K-Cup pods now in the market,” Gamgort said. “Both as a strategic partner and a minority shareholder, we are excited by the path ahead.”
In September last year, Chobani, which already includes oat milk, Greek-style yogurt drinks, and probiotic beverages in its portfolio, decided to abandon its plans for an IPO, attributing the decision to challenging trading conditions.