In a bold move, Chobani, the brand that revolutionized the Greek yogurt industry in the 2000s, is now making waves in the world of bottled cold coffee. The company has exclusively revealed to Fast Company that it’s acquiring La Colombe Coffee Roasters, the third-wave coffee pioneer known for its unique cafe experiences and nitrogen-infused canned lattes.
A Blend of Visionaries:
Hamdi Ulukaya, the driving force behind Chobani, recognized the synergy between the two companies during a joint booth at Expo West. This realization led to a magical $900 million deal, with $44 million in cash and a $550 million loan (oversubscribed three times) making up the financial cocktail. Chobani’s recent partner, Keurig Dr Pepper, also invested $300 million for a 33% stake.
Ulukaya, who was La Colombe’s sole investor until Keurig’s involvement, has a history with the brand. Initially drawn to La Colombe’s exceptional coffee supplied to his first Chobani cafe, Ulukaya’s admiration deepened when he learned about a potential private equity acquisition that threatened the brand’s essence. Against financial advice, he offered $60 million for a controlling stake, demonstrating his commitment to preserving something beautiful beyond profit.
Financial Grounds and Growth:
Moody’s recently upgraded Chobani’s debt, noting a meaningful improvement over the past 18 months. With net sales exceeding $2 billion and a reduced debt ratio, the company has proved its financial strength. Chobani’s decision to forego an IPO further emphasizes its self-sufficiency.
Keurig’s stake will convert to Chobani equity, and La Colombe’s management remains unchanged. Leveraging Keurig Dr Pepper’s extensive distribution network, Chobani plans to expand La Colombe’s retail presence two- to three-fold. The recent introduction of La Colombe-branded K-Cups aligns with this strategy.
Chobani’s Bold Venture Beyond Yogurt:
Ulukaya sees the acquisition as a gift to Chobani, emphasizing that he wouldn’t have sold La Colombe to anyone else. The move marks Chobani’s expansion beyond yogurt into the competitive world of bottled coffee. Ulukaya envisions Chobani and La Colombe working together to become tomorrow’s modern food company, disrupting the market and offering better, nutritious options.
Reinventing the Latte:
Under Ulukaya’s guidance, La Colombe’s latte cans underwent an 18-month reformulation journey. With reduced sugar content and refreshed flavor, mouthfeel, and shelf stability using Chobani’s milk-fermentation technology, the new cans are set to debut in March. Ulukaya envisions La Colombe 2.0 challenging dominant bottled-coffee players with options that prioritize natural ingredients and reduced sugar content.
In a market where most canned coffees rely on instant coffee and additives, La Colombe stands out with its use of cold brew, milk, and natural sweeteners. Ulukaya believes that by making coffee as natural, wholesome, and delicious as possible, consumers won’t feel guilty about incorporating it into their daily routines. As Chobani takes a bold step into the world of cold coffee, the $900 million acquisition of La Colombe positions the company for further growth and disruption in the evolving landscape of consumer beverages.
Feature Image Credit: GettyImages
