Greek yogurt maker Chobani buys coffee company La Colombe in a $900 Million deal, granting Chobani entry into the ready-to-drink coffee industry.
Chobani Founder, Chairman, and CEO Hamdi Ulukaya joins Yahoo Finance Executive Editor Brian Sozzi to discuss the journey to the La Colombe acquisition, calling it a "dream come true" while constantly diving into "wild waters" against larger competitors in the space.
"I learned in this business if you are going to start something to make it a meaningful player, there's no shortcut... you have to be patient, and you have to build infrastructure and capability and brand and the trust," Ulukaya states, adding: "I had eye on coffee category for the longest time... and I thought that this category was going to be evolved in all dimensions."
Ulukaya’s says the acquisition “made total sense” due to shared values and the offerings of both companies.
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Video Transcript
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BRIAN SOZZI: Chobani is giving its business a caffeine kick buying up the La Colombe coffee chain for $900 million. The Greek yogurt maker is setting its sights on the ready-to-drink coffee industry that it says is worth $3.8 billion and has seen 5% growth in the last two years. Chobani hopes the acquisition will complement its current offering of milk alternative and creamers. And the CEO Hamdi Ulukaya joins me now.
Hamdi, it has been a while. Good to see you. Welcome to Yahoo Finance. Congrats on this big purchase.
I know this is a very big event for you as a founder. And for you as the businessperson and the leader of this company, why exactly did you make the acquisition? And why do you think now is the right time? Because you have invested in this brand a couple of years ago.
HAMDI ULUKAYA: Yeah. Brian, good to see-- good to see you. I'm so happy to be with you.
It's been a journey in Chobani and, of course, it's been a journey for me personally at La Colombe. But coming to this point just before holidays, it's been dream come true for me. But I have been very, very patient. I have been part of both companies for the last, I would say, five, six years, of course, from Chobani from the beginning.
And I learned in this business, if you are going to start something to make it as meaningful player or do a disruption, there is no shortcut. You have to be patient and you have to build infrastructure, and capability, and brand, and the trust. And you have to be going into a wild waters competing and facing with large CPGs that has been around for a long, long time. The end of that patience for me is not to take my eyes off from yogurt category. And when Chobani performed really well, that's one, innovate meaningfully.
And I had eye on coffee category for the longest time, Brian. And I thought that this category was going to be evolve in all dimensions. And La Colombe has been around for 30 years, but made meaningful innovation, how this behavior is changing along the way.
And we entered coffee creamers category with Chobani brand about two and a half, three years ago and that is related to a coffee category where people are purchasing cold brew in a large scale in supermarkets and ready to drink on convenience stores and other outlets. This category very clearly has been changing in a very dramatic way. And La Colombe launched draft latte years ago seeing this, actually fueling this. And it made total sense to bring them together and use all the resources and capabilities that we both have at Chobani La Colombe and make this a meaningful combination.
BRIAN SOZZI: You don't become a successful entrepreneur, Hamdi, without taking a few risks. And I just-- I'm going to choose to hear, one, 2005, when you bought that manufacturing plant, upstate New York. This another risk taking venture for your business. As a founder, how do, when to pull the trigger on a big risk?
HAMDI ULUKAYA: Brian, you know, I haven't done much, you know. I started Chobani and I knew very early on this journey is going to be very difficult one. And I had been offered some meaningful return on my success along the way and I said no.
Because me and the team, we had a greater goal. We wanted to make meaningful change of how people are accessing the food in this country. And coffee La Colombe is one of the easiest decision I've made.
When I built the plant in Idaho, 2012, 2013, it was million square feet. We had not sold a cup of yogurt at the time. It was a long shot. That could have gone really, really wrong, but thank god this became one of the best decision I've ever made.
La Colombe is very emotional for me, Brian, at the same time because I've been involved for the last five, six years of the people. I love this history of the brand. I love the people who are so crazy about making a perfect cup of coffee every time.
And they're so excited that with Chobani this brand will be keeping what makes it so amazing, so unique, but expanding to make it available everywhere. That excites everybody. So to me, it was a very quick, easy decision. It was just waiting for the right time to be able to make it.
BRIAN SOZZI: If I do not talk to you in six years, where is Chobani? Is this finally the public company you and I talked about potentially happening six years ago? Is it part of a larger brand? I mean, does this weigh on you at all as a founder of this big, successful food company?
HAMDI ULUKAYA: Chobani can be a great public company and that would be making if that happens one day. We do not have any pressure. We do not need-- we don't have need.
I've always said it publicly, I would love my people, people who work for company for the longest time to have an access to what they have worked as their shareholders. That would be a good dream to come true. And if that day comes, I'll make that decision really fast.
Today, really I'm focusing on every day like I did last year is people, product, and what we can do as innovation and community work. Going forward, our journey will be a little bit faster because most of the work has been done. We're still very, very careful, but I'm really excited to take La Colombe, put it into Chobani platform, and make it success, and make it a lot shorter than the journey for Chobani. So six years from now, if La Colombe is not a number one coffee brand in the country, I have not done my job right.
BRIAN SOZZI: All right, well, good luck with this integration. Congrats on the purchase and hope to talk to you within a six-year time period. Hamdi Ulukaya, founder and CEO of Chobani, always a real treat to get some time with you. Thanks for joining Yahoo Finance. We appreciate it.
HAMDI ULUKAYA: Good to be with you. Happy holidays.
