by Sarah Charles for Age of Coffee

Every headline about Keurig Dr Pepper’s (KDP) decision to sell its Chobani stake back to the yogurt maker for $925 million has understandably focused on balance sheets, corporate splits, and beverage strategy. But there is a coffee story buried inside this transaction that the press has only skimmed the surface of: La Colombe has no home in KDP’s new empire. And that says everything about where the coffee industry is heading.

How La Colombe ended up here

In July 2023, KDP announced that it was investing $300 million in La Colombe for a 33% stake, primarily to secure distribution rights to the brand’s ready-to-drink products. The Philadelphia-born roaster built what the specialty industry builds best: a reputation on the strength of a compelling story. Co-founder Todd Carmichael, television personality and host of Travel Channel’s Dangerous Grounds, gave La Colombe a narrative that traveled fast and far. The show centers his search for the finest coffees in the world, and it landed at exactly the right moment. The third wave was cresting: consumers were newly curious about origin, craft, and quality, and a charismatic white male founder on television, hunting rare beans in remote corners of the world, was the perfect cultural product for that moment. La Colombe masterfully swooped in and surfed the third wave.

Within specialty circles, La Colombe’s reputation was complicated. The main critique was that the roasting hadn’t kept pace with the sourcing. But that reading is reportedly only half the story. “Their sourcing was direct. They cupped everything – it was all 100% specialty and direct trade,” says a senior coffee professional who spoke on condition of anonymity. “The industry from 2013 onwards had changed so dramatically. The main critique was that the roasting hadn’t evolved. I strongly disagree. From 2013 to 2024, roast profiles changed dramatically.” The perception, he argues, owed more to La Colombe’s scale and Carmichael’s outspoken personality than to the coffee in the cup. “There’s always a backlash against people who get bigger. Carmichael was also poking the bear, speaking his mind.”

La Colombe also invented both a new product and a new category – the draft latte: a nitro-pressurized canned coffee using a patented valved can technology, frothy and cold without additives. It reportedly became the first company to own its own dairy production facility, and when the draft latte launched on Amazon in March 2016, 10,000 cans sold out in under an hour. By 2017, it was the fastest growing RTD coffee in the U.S. The company opened a 55,000 square foot production facility in Western Michigan, reportedly capable of producing 250 million cans a year. The RTD coffee sector it helped pioneer is still booming today.

But to understand what is really happening now, the full ownership timeline matters. In 2014, private equity firm Goode Partners invested $28.5 million in La Colombe, valuing the company at $66.5 million. The following year, Hamdi Ulukaya, founder and CEO of Chobani, bought out Goode Partners to become La Colombe’s majority owner and sole investor – the purchase price undisclosed, though the company’s valuation at that point remained a fraction of what it would later become. By July 2023, when KDP invested $300 million for a 33% stake, the implied valuation had reached approximately $909 million. Five months later, Chobani acquired La Colombe outright for $900 million —, funded via a $550 million term loan and the conversion of KDP’s La Colombe equity into Chobani shares. And now KDP is selling those Chobani shares back for $925 million.

The coffee is the same, but the valuation went from $66.5 million to $900 million in less than a decade. Each transaction passed the asset upward and inflated its value further. The question now is who, at these prices, can afford to want it.

Two companies, no room for premium

In the architecture of the two companies KDP is building, La Colombe has no home. Global Coffee Co. will be built for scale, to position itself as big coffee leader: Keurig’s dominance in North American single-serve, JDE Peet’s portfolio of mass-market European brands (Jacobs, Douwe Egberts, L’OR) and the combined company’s ambitions in Asia, where coffee consumption is growing fastest. A premium roaster with a devoted urban following and a relatively small retail footprint is neither central nor strategic in that context.

Beverage Co., meanwhile, is Dr. Pepper, 7Up, and Snapple, to name a few: a massive portfolio of soft drinks where coffee has no place. La Colombe is too premium to anchor a volume play, and too niche to justify balance-sheet space in a company carrying significant debt from the hefty JDE Peet’s acquisition. “If I think about KDP in particular – great return on their investment,” a senior coffee professional says. “I think they’re focusing back on what they do well.” KDP extracted what it needed, and formalized it in separate commercial agreements that survive the divestiture: a K-Cup licensing deal and ongoing distribution of La Colombe’s RTD beverages through its retail network. The equity was perhaps never the point. The infrastructure was.

This would be easier to dismiss if it were a one-off. It isn’t.

Nestlé acquired Blue Bottle in 2017 for a reported $425 million, positioning it as the premium future of its coffee portfolio. By 2024, it had sold to the investment firm behind Luckin Coffee for less than it paid, rapidly closing cafes as the cost vastly outweighed the profit. Stumptown and Intelligentsia, the twin pillars of American third wave coffee, were acquired by Peet’s (itself owned by JAB Holding) in October 2015, and both were promised independence and resources. A decade later, both sit inside JDE Peet’s, their identities largely subsumed into a global portfolio strategy in which specialty positioning serves no meaningful commercial purpose. Instead of being rejected, they have been absorbed – which is arguably a less visible version of the same failure.

“There was such a rush into private equity,” a senior coffee professional recalls. “I remember hearing the valuation of Blue Bottle and thinking – that’s an insane amount for what they were making at the time. How is that going to play in middle America? It didn’t. People realized the amount of money that got thrown around wasn’t justified.”

The wave of corporate acquisitions of brands that defined the 2010s, built on the assumption that premium would scale, has produced two outcomes: brands sold off when the scaling didn’t materialize (La Colombe, Blue Bottle), and brands kept but made invisible (Stumptown and Intelligentsia).

The reasons are structural. Green coffee prices at historic highs compress margins everywhere, but hit premium brands hardest: their consumer promise is built on quality and sourcing transparency, costs that cannot be cut without undermining the brand itself. The aspirational consumer who once stretched their budget for a bag of single-origin Ethiopian is under sustained financial pressure as middle-income spending slows across major markets. The specialty customer base hasn’t disappeared, but it has become smaller and less reliable as a corporate growth driver.

A generational shift compounds this. For younger coffee drinkers, the third wave package of  origin story, processing method, and cupping score carries less weight than it once did.

Coffee is increasingly a flavor platform: sweet, functional, and customizable. The RTD market La Colombe was positioned to serve has fragmented into energy drinks, adaptogenic beverages, and protein-enhanced formats that don’t require premium coffee credentials to win. Big coffee simply read the room – the Chobani divestiture is the latest confirmation that bets have been recalibrated accordingly.

What does this all mean for the rest of the industry?

When KDP completes its separation, Global Coffee Co. will become the world’s largest pure-play coffee business by revenue, with combined annual coffee sales of around $16 billion. Its competitive frame will be Nestlé. The race it is running is for pod market share, retail shelf space, and emerging market penetration rather than for the loyalty of specialty – or even premium – consumers.

The acquisition pathway that shaped how ambitious specialty brands thought about their futures, or the assumption that a KDP or a Nestlé would eventually come calling, is closing. Big coffee has concluded, through expensive experience, that specialty does not scale the way it hoped. “Is specialty coffee a safe bet?” a senior coffee professional asks. “You can get good coffee anywhere now. The question is how diversified is the portfolio – and whether you’re in it because you love it, or because you want the growth.”

While this is uncomfortable for many, it’s also clarifying. Global Coffee Co. will not be competing for the same customer as a well-run independent roaster with strong origin relationships and a coherent identity. The distinction between the mainstream coffee world and the specialty one, blurred during the acquisition frenzy of the 2010s, seems to be sharpening again. And for those who stayed independent, that sharpening creates space – provided they have access to finance, which is hard to come by these days.

There is another way to read this entire sequence, and the numbers make it difficult to dismiss. A brand valued at $66.5 million in 2014 reached $900 million by 2023, passing through private equity, a billionaire’s personal investment, a distribution giant, and a yoghurt company. Each transaction inflated the asset further. Whether by design or fortunate sequencing, the arithmetic is hard to argue with. KDP’s exit at $925 million, timed precisely to a corporate restructuring that provided the perfect justification, is either very good planning or very good luck. The only question worth asking now is whether the shares have found their final home, or whether the next buyer is already lined up.