As part of the deal, KDP will sell and distribute La Colombe RTD coffee products | Photo credit: La Colombe

Keurig Dr Pepper (KDP) has announced it will take a 33% stake in US specialty coffee roaster and  café group La Colombe, marking its first investment in the specialty coffee segment. 
 

KDP’s $300m equity investment is expected to close by the end of the third quarter and is forecast to become ‘modestly accretive’ by the second half of 2024. Once finalised, KDP will become the second largest investor in Pennsylvania-based La Colombe after majority owner and Chairman Hamdi Ulukaya. 

As part of the strategic partnership, JAB Holding-backed KDP will sell and distribute La Colombe ready-to-drink (RTD) coffee products across its direct store distribution network from late 2023. The coffee and soft beverages group will also license, manufacture and distribute La Colombe branded K-Cup coffee pods in the US and Canada from 2024. 

“We are excited to partner with Hamdi and the La Colombe team to drive value for both companies. This partnership will enable KDP to expand its reach into high growth RTD and super premium coffee segments and will meaningfully increase La Colombe's availability to consumers,” said Bob Gamgort, Chairman and CEO, KDP. 

La Colombe, which operates 32 cafés across seven US states, will use the proceeds to accelerate growth and pay off outstanding debt.   

“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. 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,” Ulukaya added. 

KDP was formed in July 2018 following JAB Holding Company’s acquisition of US soft drinks manufacturer and distributor Dr Pepper Snapple. The German conglomerate merged the company with its Keurig Green Mountain coffee business in a deal worth $18.7bn.   

While the La Colombe partnership marks KDP’s first direct investment in the US specialty coffee market, the coffee and soft beverages company signaled its intent to harness growing demand for high-end coffee at-home in July 2022, when it launched Intelligentsia Coffee K-Cup pods – a brand which also sits within JAB Holding’s vast coffee portfolio. 

The La Colombe agreement increases KDP’s share of the US specialty at-home segment, where it competes with Nestlé, which purchased a majority stake in boutique café group Blue Bottle Coffee for a reported $425m in 2017 and formed the Global Coffee Alliance with Starbucks in May 2018. 

KDP’s portfolio of more than 125 owned, licensed, partner and allied brands also includes retail coffee products from Caribou Coffee, Cinnabon, Gloria Jean’s, Krispy Kreme and Panera Bread.