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Keurig Dr Pepper Inc signs a partnership agreement with La Colombe for sales and distribution

Keurig Dr Pepper Inc signs a partnership agreement with La Colombe for sales and distribution

July 22 - 2023

Coffee Geography Magazine


Keurig Dr Pepper Inc. and La Colombe signed a joint strategic partnership agreement to increase sales and distributiont on 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 is an independent, high-growth, super premium coffee company that serves consumers across multiple channels, including the retail trade, branded cafes, foodservice and direct to consumer. The brand is the only vertically integrated ready-to-drink coffee company, owning the entire coffee journey from conscious bean sourcing and premium roasting to the creation of exceptional product experiences for loyal customers. 

Under the long-term sales and distribution 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 U.S. and Canada.

la colombe

KDP will make a cash investment in La Colombe of $300 million, 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. KDP's investment in La Colombe represents a multiple of approximately 3.0X estimated 2024 consolidated net sales. 

"We are excited to partner with Hamdi and the La Colombe team to drive value for both companies," stated 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."

Bob Gamgort, Chairman & CEO of Keurig Dr Pepper

Bob Gamgort, Chairman & CEO of Keurig Dr Pepper

"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 ready-to-drink coffee distribution to KDP will begin in late 2023, while the launch of La Colombe branded K-Cup® pods will occur during 2024. 

The equity investment, which is subject to regulatory approval, is expected to close by the end of the third quarter. KDP expects the strategic partnership to be modestly accretive on a full-year basis, beginning in the back half of 2024. Advisors on the deal for KDP included Guggenheim Securities LLC and Skadden, Arps, Slate, Meagher & Flom LLP. La Colombe's advisors included Blank Rome LLP.