Molson Coors Beverage Co. announced a long-term deal with La Colombe Coffee Roasters to expand distribution of its specialty ready-to-drink (RTD) coffee products in convenience and drug stores nationwide.
Under terms of the deal, Molson Coors will tap into its vast distribution network to move La Colombe’s Draft Latte and Brazilian Cold Brew products beginning in January 2021.
The partnership with Molson Coors will allow La Colombe to increase its retail footprint by more than 400% within 18 months in convenience stores, which rank as the top channel for ready-to-drink coffee, accounting for some 41% of total retail sales, per Nielsen data.
“This provides us with a great opportunity to partner with a leading company in the ready-to-drink coffee space,” said Pete Marino, president of Molson Coors’ emerging growth division. “La Colombe is a great brand. They are deeply committed to quality; they intercept thousands of coffee drinkers daily in their cafes and they have an unreal commitment to furthering that loyalty with their delicious RTDs.”
The 10-year-deal represents Molson Coors’ latest effort to expand beyond beer, a play that has diversified its portfolio to include an expanding roster of non-alcoholic beverages, better-for-you offerings and CBD beverages. Now that portfolio includes one of the fastest-growing, ready-to-drink brands in the world.
Founded in 1994 and known for its ethically sourced ingredients and high-quality roasting technique, La Colombe is credited as being a pioneer in the third-wave coffee revolution, which focused on the culinary aspect of coffee and helped redefine it as a sophisticated product.
The Philadelphia-based coffee roaster’s ready-to-drink coffee beverages are available in thousands of grocery and big-box stores nationally, in addition to its 30 cafes in six states.
“The RTD coffee opportunity in drug and c-stores is a huge opportunity,” said Marino, “and with La Colombe, we believe we have partnered with the best company in the RTD coffee space when you look across their brand strength, their quality and their innovation pipeline.”
Consumer demand for RTD coffee products is growing. The U.S. market is estimated to be worth $4.6 billion today, and it is expected to grow by more than 60% over the next five years, according to an analysis of third-party data.
And La Colombe ranks among the fastest growing in the U.S. ready-to-drink coffee category in the total U.S. food channel, IRI data show. Over the 52-week period ended Sept. 6, La Colombe posted 59% growth, more than double that of the industry rate of 22%, per IRI.
“The customer base is telling us what they like to drink,” said Todd Carmichael, La Colombe’s CEO and co-founder. “The numbers are solid across all brick-and-mortar retail.”
It’s not the first time Molson Coors and La Colombe have joined forces. In 2019, they paired up to test La Colombe Hard Cold Brew coffee, a ready-to-drink cold brew with 4.2% alcohol-by-volume. After the test concluded, the two companies found their goals for the future aligned, Marino said.
“When we strategically stepped back and said, ‘What are the categories that are interesting to us?’, we said RTD coffee, energy and enhanced water,” he said.
The potential for success is evident in La Colombe’s sales in grocery stores.
“Our retail partners have never seen anything like it,” Carmichael said. “The velocities are just outstanding. Our early adopters are moving over 200 cans a week, which is setting new standards.”
Additionally, consumers have shown a thirst for innovation that challenge their perception of products, Marino said, pointing to the success of new Molson Coors products like Vizzy Hard Seltzer and Blue Moon LightSky. As part of the deal, Molson Coors will have access to new and innovative products La Colombe develops.
“We’re two companies who appreciate innovation,” Carmichael said. “Combining our forces and getting Draft Lattes in more stores all around the country will bring great things to both of our futures.”
Both companies came out winners in the distribution deal, Marino said. “It’s a great opportunity for the Molson Coors beverage company, and it’s a great opportunity for La Colombe to continue to sell these great products to coffee enthusiasts across the country.”