How did Todd Carmichael, co-founder and chief executive of La Colombe Torrefaction Inc., get the executives in charge of 5,000 Target, Whole Foods, Publix supermarkets, Wegmans, Wawa and Costco stores to agree to carry the Philadelphia company’s canned draft lattes?
“I’d say,` I’m here to make you coffee.’ They pop one. They drink it and they get it,” Carmichael said. “I never had to open a brochure or a slide show.”
Carmichael got enough purchase orders to enter a line of business that the high-end coffee company executive thinks will constitute nearly 50 percent of the Philadelphia-based company’s revenues by the end of 2017.
“The ceiling is way up there,” Carmichael said. About 70 stores now carry the canned lattes; 2,000 should have them by the end of January and by the end of February, there are orders to stock 5,000 supermarkets and food stores nationwide, with more coming, he said.
In June 2015, La Colombe introduced its draft latte in its cafes. Cold, thick, and foamy, the coffee beverage is dispensed from a keg, like beer, the pressure turning it into a milkshake-like latte that somehow manages a hint of sweetness, even though the only ingredients are milk and espresso coffee.
Retail price: $2.99 a 9-oz. can, with several flavors – a traditional latte, mocha, vanilla and a triple – three espresso shots in a single can.
“I think the market could use an exciting new coffee drink,” said John Stanton, a professor of food marketing at St. Joseph’s University and a former marketing executive at Melitta USA, the German coffee company formerly headquartered in Cherry Hill, where roasting still occurs.
“The younger generation is looking not just for a good cup of coffee, but something a little different,” he said.
Stanton said it’s not unusual for companies that build their brands in specialty retail to try to increase sales via a mass distribution channel, going, say, from café to the supermarket. But there is a risk.
“You could lose that panache,” he said.
For example, Stanton said advisers warned IZOD that they’d “lose their mystique” by selling their shirts, once only available in golf shops, in department stores. Yes, Stanton said, IZOD lost some mystique, “but they sold millions more shirts.”
That’s a gamble Carmichael is willing to take, with La Colombe putting a “couple dozen millions” behind the bet, buying and setting up production in a dairy factory in Michigan that will employ 120. “We believe in making what we sell,” Carmichael said.
In 1993, Carmichael and La Colombe co-founder, JP Iberti, now company president, began roasting coffee in Philadelphia. “I thought, `Oh my God, these people need me,’” Carmichael said.
Over the years, the partners expanded their privately-held business, adding cafes, supplying 3,000 restaurants and offering their products online. Carmichael said the company was not only building its brand, but adding expertise, staff and enough financial stability to enable to make its next big move.
Some of that stability arrived in August, 2015. Hamdi Ulukaya, the brains behind Chobani Greek-style yogurt, became a majority investor. Ulukaya challenged La Colombe to create a ready-to-drink latte for the mass market.
After piloting the canned latte in its cafes, the drink got an official launch at a big coffee exposition eight months later, in March, 2016. Meanwhile, La Colombe executives looked for a plant to mass produce the draft lattes.
One, a former yogurt production facility, materialized in Michigan, perfect because it was available, a dairy plant, and near a lot of cows. The product is 80 percent milk. “It’s a rare find, like finding a castle,” Carmichael said. “There are a lot of dairy plants in Pennsylvania, but none were for sale.” The deal closed in September, 2016 and production began in December. Carmichael said it will take 13 million pounds of coffee beans, still roasted in Philadelphia, to create enough espresso for the canned beverages in 2017.
In supermarkets, La Colombe’s beverages are stocked in the coffee aisle, the grab-and-go area and the dairy shelves, depending on the store, Carmichael said. “The dairy area is one of the most visited parts of the store.” And it’s evolving, allowing a new entry like the latte to join almond and coconut milks alongside half-and-half and skim.
Carmichael is hopeful. Coffee, he said, is the “national beverage, more than soda or wine. We’re running with the wind.”