Can Chobani’s Founder Help La Colombe Become the Next Coffee Megachain?

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La Colombe's latest creation is the "draft latte."
La Colombe's latest creation is the "draft latte." Photo: Alexander Mansour/La Colombe

Since Todd Carmichael opened his first La Colombe café in 1994, he’s built up his craft-coffee company slowly, adding a few more locations in New York, Chicago, and Washington, D.C., and expanding his wholesale operation. Now, there are a dozen spots, but that’s about to change: Carmichael has big plans for his business, and with the help of a high-profile, brand-new investor, Chobani founder Hamdi Ulukaya, he plans to enact them quickly. Like Blue Bottle’s James Freeman, Carmichael wants to go big. He also wants to innovate, and judging from the recent success of his draft lattes (made from cold-brewed coffee and frothed milk), his creative, ambitious thinking could go far. We called him up to ask him about all the ways La Colombe is about to change — like expanded food offerings (which, yes, include Chobani yogurt), canned lattes in grocery stores, and opening new shops in every major U.S. city.

I’m from Philly, so I remember La Colombe as a tiny operation. It’s been fascinating to see it develop over the years. How will Hamdi’s involvement impact the speed of growth?
For me, the company, and the mission, has always been the same. My intention is to work the hardest to become America’s Coffee Roaster. That goes back to 1994. My first step outside of the Rittenhouse area was Manayunk, so you saw my baby steps. I knew I’d have to find the best dance partner I could to take the company to the next level. I waited, and I found the guy. In Hamdi’s DNA, he shares my vision. We don’t confuse the idea that in order to get big, you have to compromise the integrity of your product. And we have similar ideals about how to treat our people, and how important farmers are.

This is a guy who started like I did: He made his first little batch of yogurt by hand, and I made my coffee by hand. But we understand the importance of sharing that with a lot of people. It requires a certain mentality, though. It’s not getting big that makes you bad; it’s when you lose your integrity.

What do you think is the most important way for La Colombe to expand and advance?
There are multiple ways of providing coffee to the customer: through cafes, through wholesale, and directly to customers through online sales or grocery stores. When I look at the retail shelves in America, they need to improve and evolve: The packaging is off, the logistics are off, and the bags of coffee are old. The milk industry is way ahead of us since 72 hours out of the cow, milk’s in the fridge. Also, the café experience asks America to come to it. But the real aggressor also goes into people’s homes, whether that’s through the internet, or at the grocery store.

I like your idea of selling better canned lattes. I grew up drinking those sugary bottled Frappuccinos, but there’s no adult equivalent.
That’s one of many ways we want to grow: I don’t think that arena has found how high it can go. There’s going to be one interesting, smart coffee guy who can sell something that’s natural, doesn’t have a ton of sugar, and can offer a complete latte experience. When I look out into the future, I want that guy to be me. It’s a legitimate category. Bottled drinks have 32 grams of sugar in them — I wouldn’t allow my children to eat that for dessert. I’m definitely focusing on that, but I’m holding it behind me. It’s close, though. By the end of the year, I’ll have ironed out all the kinks. You want to be able to make a promise that you can keep, and my work in that area hasn’t gotten to the point where I can promise I can provide it anywhere.

Your other recent invention is serving draft lattes on tap. What kind of response are you seeing in your shops?
It has, in a very short order, revolutionized my cafés. First, I’m able to provide a product with absolute integrity — it’s a fresh look at cold coffee. I deconstructed it, I tore it apart, and I rebuilt it the way it should be. Iced coffee initially happened to us. We didn’t create the drink, and then push it out to the customers. In 1995 in Rittenhouse Plaza, someone said, “Can you put this over ice?” It was the equivalent of hearing, “Can I get a hot beer?” We didn’t have an ice machine, and no other coffee shops did. We responded by putting hot coffee over ice, pouring some milk in there, and maybe some foam and a shot of espresso.

It took me a long time, but I said, “That’s not a latte.” A latte has texture. Milk, without being texturized, doesn’t have it — it’s really an iced cafe au lait. Can I think of a cold way of making espresso? Is there a way I can make texturized milk? There are millions of gases out there, so I found one that creates a micro-foam and draws out the sweetness of the milk. Then, you have a true iced latte. Craft requires a little science.

Now 85 percent of my cold drinks have shifted to being on tap. My sales have risen nearly 20 percent. My lines are shorter — I can process orders quicker and make people happy. When you do things people are happy about, they stand in line. But I’m hardwired for line anxiety. I feel like that last person in line every day, and I’m stressed out from him or her. I’m able to chew through that a little bit faster.

Carmichael's psyched about his new draft lattes.
Carmichael's psyched about his new draft lattes. Photo: Alexander Mansour/La Colombe

Specifically how many cafés do you plan on opening?
We’d like to build 150 cafés, and that’s short of a major blanket in the U.S. I think that every city above a certain size should have at least one or two La Colombes in it.

About how long will this take to achieve?
I’m one of those CEOs that says, “Can we have all these tomorrow please?” We’ve built a pretty good team. I’d like to hit that 150 number in three or four years.

Will you able to buy the same quality of beans as you get bigger and bigger?
That’s the thing: There’s no shortage of extraordinarily talented farmers in the world right now. That was a problem 20 years ago. The world isn’t at a deficit for extraordinary coffee. It may be at a deficit of roasters who can roast it properly, but there’s enough good coffee to supply every American. Period. You do have the esoteric, bizarre coffees that will always be around, and the coffee intellectuals. Like, I’m picking up watermelon on this! But when it comes to eye-popping, specialty-grade, outrageous coffee, it’s readily available, in a way that I couldn’t have imagined 20 years ago.

At what cost will that come to customers? Coffee seems to be getting increasingly expensive.
There’s an accessibility issue. There’s this thing that if you’re a working man, you should feel fine drinking coffee from a doughnut shop. The working man deserves the best coffee, but pricing determines that. I look at my company, and I feel like I can achieve that. It’s other things, not beans, that cost a lot of money — like rent. In Manhattan, it’s hard to sell coffee below $2, because leases are so steep. Manhattan is always going to have higher prices than the rest of the planet. But in America, the median price for a beautifully made, 12-ounce draft latte should be $2.50 — that’s achievable. Or less! That’s where I think we should all be shooting.

Coffee is part of the American experience. It’s not always recognized as that, but it is. Ninety percent of us drink coffee — 90 percent! We don’t do 90 percent on anything. It sounds like someone’s been fudging the numbers. It’s who we are. America deserves better coffee. I think it’s one of our rights, and part of our experience. We drink 17 ounces day — that’s $10 a day — we cannot afford to do that. We need to get clever, and work harder … and this ties into Hamdi. He’s starting a food revolution. He truly is. He wants Americans to eat better. He just thinks they don’t have enough choices.

Speaking of food, I noticed that you’re starting to offer more in your cafés, like Birdbath Bakery’s snack pizzas. Do you have plans to expand your food offerings?
Yes! This is big! There should be two categories of savory food in shops: There’s the savory pastry, and then there’s savory café fare. No café wants to become a lunch place, and have the dialogue be about mustard or mayo. But you need to respond and make people happy. It took me a long time. The next food development, I’m not sure when it’s going to come, but I’d like it to come fairly soon. It’s not going to be a hoagie, though.

Will we now see Chobani yogurt in La Colombe outposts?
Yes. It’s taken a long time, and we had to find the most beautiful refrigerator, but there is a Chobani option coming very soon.

The other major, once-small coffee company that’s growing fast is Blue Bottle. How are your expansion plans different from James Freeman’s?
James and I are friends, and whenever we have lunch, we say, “Wow, we’re so different.” That is nice, because I don’t feel like we’re competing. I tend to prioritize the United States more than James does. There’s so much to do at home, that every time people pull me to go international, I don’t.

In terms of investors, I was looking for one guy. I was looking for a mentor — someone who wasn’t in my industry, but close to it. As a CEO, I didn’t want to spend much time with my investors. I wanted to text a guy and say, “Hey what do you think?” Our different approaches also may be a reflection of where we are. I’m not in Silicon Valley. I’m in the gastronomic hub of New York. I speak that language, more than the Wall Street one.

Can Chobani’s Founder Help La Colombe Become the Next Coffee Megachain?