Chobani’s acquisition of La Colombe shows that RTD coffee is here to stay

Acquisitions have been rampant in the coffee industry in recent years. From the likes of Nestlé and Blue Bottle, Peet’s Coffee & Tea and Stumptown Coffee, and Coca-Cola and Costa Coffee, market consolidation doesn’t appear to be slowing down.

One of the latest and most prominent acquisitions was in July 2023, when Keurig Dr Pepper purchased a US $300 million minority stake in La Colombe. As part of its 33% stake, KDP now sells and distributes La Colombe’s ready-to-drink (RTD) coffee beverages, and also manufactures, sells, and distributes La Colombe-branded K-Cup coffee pods under a licence agreement in North America.

More recently, however, iconic US Greek yoghurt brand Chobani bought La Colombe for US $900 million. The two companies have a close history, with Chobani CEO and founder Hamdi Ulukaya often publicly stating his interest in the pioneering coffee roaster.

So it’s clear that Chobani wants to expand even more into the RTD coffee segment, and La Colombe is determined to maintain its grip on the market. But what does it mean for the future of RTD coffee? Read on to find out.

Chobani & La Colombe: A history

Given how influential both brands are, the reasons for the recent acquisition are quite clear. But it’s also important to consider that the relationship between Chobani and La Colombe dates back some years.

Founded in 1994 by Todd Carmichael and JP Iberti, La Colombe was one of the first roasters to help establish third wave coffee culture in North America, with the vision “to make the world better through coffee”.

With this focus on craft and quality – alongside a commitment to supporting both local and coffee-growing communities and improving sustainable practices – the roaster quickly became a pioneer in the industry.

Fast forward nine years and La Colombe had started manufacturing RTD cold coffee drinks, including cold brew and its innovative draft lattes. The latter include a valve mechanism at the base of the cans which injects the liquid with nitrous oxide – mimicking the creamy mouthfeel of steamed milk.

Around the same time, Chobani CEO and founder Hamdi Ulukaya expressed interest in investing in La Colombe. As one of the US’ first health-focused Greek yoghurt manufacturers, the company shares a similar ethos to the roaster. In fact, Ulukaya and Carmichael even have an “anti-CEO” mindset in common – best showcased by Ulukaya’s 2019 TED Talk.

Between 2014 and 2015, Ulukaya offered La Colombe US $60 million for a controlling stake in the company. And since then, the brands have collaborated several times – including on projects supporting refugees and cold brew creamer beverages.

What does the acquisition mean for the future of RTD coffee?

Chobani’s acquisition of La Colombe will certainly help the roaster to expand its already well-established operations and wildly successful RTD draft lattes. Within 18 months of launching them, the draft lattes already comprised more than 1% of the total US RTD coffee market share. This made it the fastest-growing RTD coffee drink in the country at the time.

Meanwhile, Chobani will also benefit from the strategic partnership. Although the brand largely focuses on Greek-style yoghurts, the company also manufactures both dairy and plant-based coffee creamers and a functional Coffee & Cream drink. Until recently, it also sold a RTD cold brew product, but this has since been discontinued.

And considering Keurig Dr Pepper’s minority stake in the pioneering coffee roaster, all three companies can leverage their relationships with one another to massively expand their retail footprints.

Undoubtedly, this means that the quality of RTD coffee is only set to grow – so smaller roasters and supply chain roasters will need to keep up.

Quality should always come first

La Colombe’s and Chobani’s new draft lattes will be available in the US from March 2024 in five flavours:

Double

Triple

Vanilla

Mocha

Caramel

Both brands have emphasised that the updated cans include less sugar and also incorporate Chobani’s “milk-fermentation technology”, which is said to enhance flavour and mouthfeel and prolong shelf life.

With an additional focus on using fewer and more natural ingredients as well, the revamped draft lattes are sure to remain massively popular among coffee drinkers. Moreover, they will potentially become more widely available to consumers in the US through Chobani’s distribution networks.

Ultimately, this will make it more challenging for smaller roasters and RTD coffee manufacturers to compete – especially in a market that is becoming increasingly dominated by bigger players.

For those still interested in launching their own RTD coffee products, however, prioritising quality is essential. If brands don’t sell RTD coffee drinks which meet the standards which consumers now expect from these products then they are unlikely to see much success.

By delving deeper into the relationship between Chobani and La Colombe, the recent acquisition makes a lot of sense. But the industry definitely needs to keep an eye on how this strategic partnership develops in the coming months.

We can surely say that it will only drive RTD coffee quality even further – and specialty coffee roasters will need to stay ahead of the game.

Enjoyed this? Then read our article on why acquisitions are becoming more common in the coffee industry.

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