Keurig Dr Pepper to sell Chobani stake and facility for US$925M

USA – Keurig Dr Pepper (KDP) has agreed to sell its full equity stake in Chobani back to the company for US$800 million, as well as its manufacturing facility in Pennsylvania for approximately US$125 million.

The transactions form part of KDP and Chobani’s aim to strengthen their longstanding partnership, and ‘advance the growth and capital allocation priorities’ of both businesses.

The deal includes the Pennsylvania site’s facility lease, equipment and operations, with Chobani set to offer employment opportunities to the facility’s manufacturing and warehouse employees to ensure operational continuity. Employees in delivery, customer service and other corporate functions will remain with KDP.

Tim Cofer, CEO of KDP, said,” The transactions enhance our financial flexibility, strengthen the efficiency of our manufacturing network and support the expansion of our important distribution partnership with Chobani”.

“This change also positions the Allentown facility for continued growth under an owner whose strategic priorities are well matched to the site, while ensuring continuity for our brands, customers and employees.”

Chobani will continue to manufacture certain products for KDP at the site, located in Allentown, for a ‘defined period’ after the sale under a co-manufacturing agreement.

It has revealed plans to invest US$1.2 billion in the 1.5-million-square-foot campus over the next five years, planning to create more than 900 jobs and establishing a ‘major new hub’ for the business’ dairy product production.

The investment includes plans for up to ten new production lines. At full capacity, the Allentown facility is expected to source more than 3 billion pounds of Pennsylvania milk annually.

At the site, Chobani said it will build on its 20 years of dairy expertise to create milk with more protein and less sugar than traditional milk.

It will be available as a multi-serve milk for families, serving as the foundation for a new generation of dairy products, including high-protein shakes made with ‘real’ ingredients.

KDP said it will use the net proceeds from the transactions to reduce debt ahead of its split into two separate businesses, Beverage Co and Global Coffee Co, following its JDE Peet’s acquisition announced last year.

The deal also sees the two companies build on their distribution agreement, with KDP continuing to distribute Chobani’s La Colombe brand’s ready-to-drink (RTD) lattes and other beverage products, including future RTD innovations.

They will also continue their long-term licensing, manufacturing and distribution agreement for La Colombe-branded K-Cup pods in the US and Canada.

KDP and Chobani’s partnership began in 2023 when Chobani acquired La Colombia in a US$900 million deal.

Hamdi Ulukaya, founder and CEO of Chobani, commented: “With this deal, the plant will be used to its full potential, create value and opportunity for both companies and bring some of our best innovation to more people through KDP’s reach and capabilities. And most importantly, it means more jobs and more opportunity for Pennsylvania farmers.”

Allentown is part of more than US$4 billion Chobani is investing across its US manufacturing network.

The company is also investing in a new dairy processing facility in Rome, New York; expanding its manufacturing operation in Twin Falls, Idaho; improving its original site in New Berlin, NY; and expanding its Norton Shores, Michigan facility, which produces La Colombe drinks.

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