Chobani Buys La Colombe, No Sleep Beverage Launches 🥃

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CPG WIRE
December 16, 2023

GM and Happy Saturday, folks. We have a lot of fun stuff to dive into this morning so here’s a preview:

  • Amyris sells JVN Hair 💄

  • Jiant secures funding 💰

  • Volition debuts incubator 🆕

  • Cauliflower ice cream ⁉️

  • Omsom heads to Sprouts 🍜

Chobani Buys La Colombe ☕️

Chobani, the thriving yogurt brand that Hamdi Ulukaya launched in 2005, has found its next source of revenue growth, and it’s coffee. 

On Friday, Chobani announced that it will acquire La Colombe for $900M. The coffee brand, which was founded in Philadelphia in 1994, is best known for its delicious, influencer-friendly canned latte line and its upscale retail outlets. 

The deal for La Colombe involves $44M of cash, $550M of debt, and the 33% stake of La Colombe that Keurig Dr Pepper owns will be converted into Chobani stock. All in all, a pretty clean acquisition for Chobani. 

Chobani and La Colombe are intimately familiar with one another. In addition to sharing a booth at Expo West this past spring, they also share a common stakeholder — Hamdi Ulukaya. In 2014, the Chobani founder paid around $60M for a majority stake in La Colombe. Nine years later, Keurig Dr Pepper purchased 33% of La Colombe for $300M, making KDP the second largest shareholder behind Ulukaya. 

If it wasn’t such a complementary transaction, this deal might sound like nefarious self-dealing on behalf of Hamdi Ulukaya. But it’s an acquisition that benefits Chobani shareholders just as much as it does Ulukaya for a few different reasons. 

First, for a consumer brand of Chobani’s size — annual revenue in 2020 was $1.4B and it’s now over $2B — organic growth will only take them so far, so Chobani needs to buy symbiotic brands in order to meaningfully grow. The 5.2% organic revenue growth that Chobani posted between 2019 and 2020 just won’t do, especially if they wish to IPO at a $10B valuation. La Colombe solves this, at least in the immediate term, by offering Chobani a fast-growing brand in an enormous category. The U.S. RTD coffee category is worth $5B alone, and it’s growing considerably. 

Second, though Chobani and La Colombe sell very different products, they both sell refrigerated staples with high repeat purchase rates, and they target very similar customer profiles. The average La Colombe customer is someone who’s busy, convenience-minded, and seeking a premium, better-for-you coffee option. You could use similar adjectives to paint a picture of Chobani’s ideal customer, too. 

Lastly, there are a number of supply chain, freight, and retail synergies that Chobani and La Colombe will both benefit from. The retail synergies — with Chobani’s 95,000 doors and Keurig Dr Pepper’s distribution prowess — will be the most interesting variable to watch.

No Sleep Beverage Launches 🥃

No Sleep Beverage, a new investment firm focused on early-stage alcohol brands, officially launched with a portfolio of five brands. 

The firm was co-founded by Nick Papanicolaou who previously led M&A at Pernod Ricard USA, and served as the CEO of Castle Brands, a subsidiary of Pernod Ricard that develops and markets super-premium spirits brands. Joining Papanicolaou is David No who brings CFO and investment banking experience to the table. 

“One pain point we’re trying to solve is the lack of attention entrepreneurs often get from distributors and retailers,” said Papanicolaou. “I started as a beverage entrepreneur and quickly realized the high failure rates for independent brands, yet I also saw that the major spirits corporations have their own challenges. We’re bringing the best resources from both sides by providing many of the services that large companies offer while maintaining the creativity and agility of entrepreneurial ventures.”

Thus far No Sleep Beverage has backed five brands: 

Nine Banded Whiskey - An Austin-based bourbon brand whose name is a nod to the nine-banded armadillo. Founded in 2014 by Sean Foley, Chris Ogden, and Whitney Kroenke-Silverstein. It’s the official bourbon partner of the LA Rams. 

Solento Tequila - Founded by Taylor Steele, Solento is a USDA certified organic tequila brand that launched in 2020. You might recognize Solento based on its bottle alone which is positioned more like a fragrance than a spirit. 

Barr Hill - Founded by a lifelong beekeeper, Todd Hardie, and a distiller, Ryan Christiansen, Barr Hill is a craft gin & vodka producer that’s based in Vermont. They opened a 27,000-square-foot distillery in Montpelier in 2019. 

Juliet Wine - A luxury boxed wine brand that’s focused on sustainability and elevating the boxed wine experience. The company was founded by Allison Luvera and Lauren De Niro Pipher in 2021. 

Soley - A RTD cocktail brand that combines freshly pressed fruit juice with 12% alcohol distilled from sugar cane. The company was founded by Chris Hofbauer. 

Now that No Sleep Beverage has made its public debut, the firm plans to raise enough capital over the next 12 months to invest in six to eight more brands.

More on No Sleep Beverage here.

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Deals 💰

Mergers & Acquisitions 

  • Campari Group has acquired Courvoisier for $1.2B. The seller is US-Japanese beverage firm Beam Suntory. Cognac volume might be down 16% for the first half of 2023, but Campari is still bullish on the category, and willing to make their largest acquisition to date. Campari has been fairly acquisitive lately — they purchased 70% of Wilderness Trail Distillery for $420M then acquired a 15% stake in Howler Head (with an option to buy the remainder in 2025). Reuters

  • Bermuda-based spirits giant Bacardi has increased its stake in Teeling Whiskey, an Irish whiskey label that was revived in 2012. Bacardi first became involved with the brand when it acquired a minority stake in 2017, and now it’s the majority shareholder. Earlier this year, Bacardi purchased Ilegal Mezcal, another brand it previously invested in. The Spirits Business

  • Now-bankrupt biotech firm Amyris has sold JVN Hair for $1.25M. The buyer is Windsong Global, a consumer-focused investment firm that’s affiliated with Tengram Capital Partners. Earlier this month Amyris sold a number of other brands including Biossance, Pipette, MenoLabs, and 4U by Tia. Business of Fashion

Fundraising

  • Jiant, a Los Angeles-based hard tea & kombucha brand, raised $6M in Series A funding. The round was led by Natureza Growth Partners with additional participation from G5 Capital, Sage Venture Partners, AIR Ventures, and others. Jiant is available in 24 states and retails at Trader Joe’s, Target, Kroger, Whole Foods, and many others. PRWeb

  • Nine Banded Whiskey, the Austin-based bourbon brand that’s mentioned above, closed a $10M Series A round led by No Sleep Beverage. Austin Business Journal

  • Subtl Beauty, a maker of stackable makeup products for the on-the-go consumers, scored nearly $5.5M in Series A funding. Cult Capital led the round with additional participation from Grouse Ridge Ventures and Innovation Works. Beauty Independent

  • UK-based “super yogurt” brand Nutmeg & Hive secured £5.5M in funding from IRIS Ventures and a number of undisclosed investors. PitchBook

What’s New 🤩

Apparel, Cosmetics, and Wellness

  • Volition Beauty, a crowdsourced beauty brand that retails at Ulta and Mecca, has launched a new brand accelerator for content creators and influencers. Glossy

  • Ghiaia Cashmere, a LA-based cashmere brand, will open a stunning flagship store in San Marino, CA soon. WWD

  • IKEA dropped an awesome collection featuring reimagined archival classics from the 60s and 70s. Hypebeast

Food, Beverage, and Alcohol

  • Rolling out across retailers in New Zealand is EatKinda, a cauliflower-based ice cream brand that launched in 2020. The texture of the ice cream looks pretty damn good so my curiosity is piqued. Vegconomist

  • Ampersand Projects, the RTD cocktail brand that Casella Family Brands acquired in November, released a great-looking Espresso Martini 🔽 Twitter

  • Chobani has been busy…they just launched their first major product line in two years which is dessert-inspired yogurts. The flavors sound incredible: Apple Pie a la Mode, Bananas Foster, Mocha Tiramisu, etc. Food Dive

  • You haven’t made it until you’ve collaborated with Erewhon…superstar Olivia Rodrigo drops $18 smoothie which is available exclusively at Erewhon. Delish

  • GHOST is bringing their strong collab game to the hydration category…GHOST Hydration x Sour Patch Kids drops in early January. Love these bottles. Instagram

Data 🖥️

  • Amika, the Brooklyn-based haircare brand that Bansk Group acquired in 2022, grew revenue 93% year-over-year. In 2022, Amika did $150M in net sales. Happi

  • Some fascinating BFCM data from Next Big Shop. $9.3B in global sales took place on Shopify over the shopping holiday. Next Big Shop

Distribution News 🚚

  • Omsom is now available nationwide at Sprouts Farmers Market.

  • Textured haircare brand Pardon My Fro is launching at CVS and Target.

  • Functional beverage brand Recess launched their mocktails at Wegmans.

  • Renais Gin, the gin brand founded by Emma Watson, partnered with RNDC and will be available in the U.S. next year.