July 21, 2023
Keurig Dr Pepper Inc. and La Colombe coffee brand have entered a strategic partnership, including a long-term sales and distribution agreement for La Colombe ready-to-drink coffee and a long-term licensing, manufacturing, and distribution agreement for La Colombe branded K-Cup coffee pods. Keurig Dr Pepper will also make an equity investment in La Colombe, enabling KDP to participate in the value creation upside expected from the partnership.
La Colombe, an independent, super premium coffee company, serves consumers in the retail trade, branded cafes, foodservice, and direct to consumer. The brand is the only vertically integrated RTD coffee company, owning the entire coffee journey from bean sourcing and premium roasting to the creation of exceptional product experiences for customers.
Under the agreement, KDP will sell and distribute shelf-stable La Colombe RTD coffee beverages in KDP's direct store distribution network, which is expected to drive meaningful growth in the brand's availability across these mainstream retail channels. In addition, KDP will manufacture, sell, and distribute La Colombe branded K-Cup coffee pods, under a license agreement, in the US and Canada.
KDP will make a $300 million cash investment in La Colombe, in exchange for a 33% ownership stake in the company, making KDP the second largest investor in La Colombe behind its majority owner and chairman, Hamdi Ulukaya. La Colombe plans to use the proceeds to accelerate growth and pay off debt.
"We are excited to partner with Hamdi and the La Colombe team to drive value for both companies," said KDP Chairman and CEO Bob Gamgort. "This partnership will enable KDP to expand its reach into high growth ready-to-drink and super premium coffee segments and will meaningfully increase La Colombe's availability to consumers."
"I'm extremely excited to join forces with Bob and his team at KDP to bring La Colombe to every corner of this amazing country," said Ulukaya. "I joined the La Colombe journey eight years ago because I believe in its mission, quality, craftsmanship and social impact — and that everyone deserves quality, crafted, natural coffee. With this partnership we'll be closer to fulfilling the mission of providing exceptional coffee to all."
The transition of La Colombe RTD coffee distribution to KDP will begin in late 2023, and the launch of La Colombe-branded K-Cup pods will occur during 2024.
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