Chobani snaps up La Colombe coffee firm in US$900M deal as RTD market proliferates

18 Dec 2023 --- Greek yogurt brand Chobani has acquired coffee company La Colombe, expanding its beverage business into oat milk, cold-brew coffee, probiotic beverages and coffee creamers. The deal’s outcome could lead to synergistic applications such as Chobani creamers and oat milk being used in coffees manufactured at La Colombe’s production plants.

To finance the deal, Chobani capitalized on its combination of a newly issued US$550 million term loan, cash on hand and the exchange of Keurig Dr Pepper’s (KDP) minority equity stake (33%) in La Colombe into Chobani equity.

“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 craftsmanship of La Colombe to a next generation of consumers, powered by a strong distribution partner in KDP,” says Hamdi Ulukaya, founder and CEO of Chobani.

Going forward, La Colombe will retain its independent brand identity, an approach that allows for “collaboration and knowledge sharing” between the two companies while “preserving the unique identity and innovation for which La Colombe is known.”

Brand crossovers
La Colombe is a rising player in the fast-growing ready-to-drink (RTD) coffee sector. The culmination of its portfolio and Chobani’s core yogurt offerings will “add to the appeal of Chobani’s modern food innovations,” including oat milk and creamer, says the company.

Cold coffee brew are attracting younger consumers.Under Chobani’s ownership, La Colombe will leverage its retail execution, marketing and cold chain capabilities to grow its multi-serve offering.

Through its recently announced sales and distribution agreement with KDP, the beverage maker also plans to “significantly expand” the reach of its single-serve product line and grow underdeveloped channels like convenience retail.

Beyond these plans, Chobani will also aim to enhance La Colombe’s procurement practices, deliver “meaningful cost synergies” and enhance its overall operational performance.

Capturing the “cold coffee” trend
According to Statista, the global RTD coffee market has a projected volume growth of 2.4% in 2024, expanding at a CAGR of 5.79% from 2023 to 2027.

Amid the popular coffee variants, cold coffee is fast emerging as a favorite of the younger demographic. Reportedly, 15% of coffee in the world is being consumed cold, leading to a surge in cafe-style cold coffee products. 

In line with the spike in consumers’ preference for the cold beverage, La Colombe’s RTD line has grown over three times in the last five years and is positioned for “accelerated growth,” notes the company.

Meanwhile, the cold brew coffee trend led to Nescafé launching its first-ever soluble coffee designed especially for cold water or milk consumption over ice earlier this year.

Cold coffee brews are also witnessing innovative technological advancements in the US. In 2019, lllycaffè formulated a coffee blend that infuses ambient air into the cold brew to create a nitro effect without using kegs or nitrogen tanks.

By Insha Naureen