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Keurig Dr Pepper Inc. (KDP) and dairy processor Chobani have announced a multi-faceted series of commercial transactions designed to realign capital assets and advance the growth priorities of both enterprises.
Under the agreed terms, KDP will sell its entire equity stake in Chobani back to the dairy producer for $800 million. In a connected transaction, Chobani will acquire KDP's manufacturing facility and warehouse in Allentown, Pennsylvania, for approximately $125 million.
Concurrently, Chobani announced plans to direct $1.2 billion over the next five years to expand the Allentown site into a 1.5-million-square-foot manufacturing and logistics campus, creating more than 900 jobs.
The transactions are scheduled to close in the third quarter of 2026, subject to customary closing conditions.
Tim Cofer, Chief Executive Officer of Keurig Dr Pepper, stated that the transactions enhance financial flexibility, improve manufacturing network efficiency, and support the continued expansion of the distribution partnership with Chobani, while matching the Allentown site with an operator aligned with its production capabilities.
"Together, they 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."
Expanded Distribution and Licensing Agreement
Alongside the asset transfers, KDP and Chobani are broadening their commercial route-to-market partnership.
KDP will continue distributing La Colombe ready-to-drink (RTD) lattes and other Chobani-owned beverage lines through its company-owned direct-store-delivery (DSD) network, which reaches approximately 80 per cent of the US population. The agreement also covers future Chobani RTD innovations.
Additionally, both companies have renewed their long-term licensing, manufacturing, and distribution partnership for La Colombe-branded K-Cup pods across the United States and Canada.
The commercial collaboration originated in 2023 when KDP partnered with La Colombe, expanding after Chobani acquired the RTD coffee business later that year.
Allentown Facility Expansion and Dairy Innovation
The $1.2 billion capital programme in Allentown represents the largest private agricultural investment in Pennsylvaniaâs history. First opened by KDP in 2021, the site is positioned within 500 miles of roughly 40 per cent of the US population.
Chobani plans to install up to 10 high-speed production lines across the 1.5-million-square-foot campus, utilising the infrastructure to scale its next generation of dairy products, including reduced-sugar, high-protein fluid milks and functional dairy shakes. At peak operating capacity, the site is projected to source more than three billion pounds of raw milk annually from Pennsylvaniaâs 4,300 dairy farms.
"Our partnership with KDP started with La Colombe back in 2023, and it grew when La Colombe became part of Chobani," said Hamdi Ulukaya, Founder & CEO of Chobani, they continued:
"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."
Pennsylvania Governor Josh Shapiro added that the private-sector investment strengthens the state's dairy processing infrastructure and reinforces its position in agricultural manufacturing.
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