Keurig Dr Pepper (KDP) and La Colombe announced a strategic partnership last week.
According to a press release from the companies, the deal includes 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.
According to the statement from the companies, “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.”
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.
The ready-to-drink (RTD) tea and coffee market was estimated to grow to $103.62 billion in 2022, according to Grand View Research, and the category is predicted to grow at an annual rate of 6.2% from 2023 to 2030, according to consumergoods.com.
Distribution efforts will transition in late 2023, and La Colombe-branded K-Cups will launch next year.
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