😄 The world is getting more optimistic.

That’s according to a global survey finding optimism in everything from health to the economy — 50% of humans surveyed predict the economy will improve this year.

And 41% say they’ll use social media less often this year, perhaps because of growing evidence that “demonstrates a negative association between social media use and mental health issues.”

Today, we'll discuss something quite optimistic: the story of La Colombe, a coffee business that just sold for $900 million.

All this, and more, in just 4 minutes to read.

— Matthew

"Rome wasn’t built in a day, but they were laying bricks every hour."

— John Heywood

Maximize Your Content Creation

Thank goodness for Castmagic, the ultimate time-saver.

Castmagic is an AI audio-first content workspace that allows you to turn any audio file or video into more content. Upload and generate all your ready-to-publish content. Think of it as a platform that helps you extract all of the value that sits within your content.

Castmagic works for all kinds of professionals:

What Else We’re Into

📺 WATCH: How Annapolis cooks feed 4,400 midshipmen in 20 minutes

🎧 LISTEN: Junk to Gold by billionaire Willis Johnson, via Clay Finck

📖 READ: How OpenAI plans to deter 2024 election misinformation

Two part-time baristas in Seattle meet at a dive bar, become best friends, move to Philadelphia, and open a one-off coffee shop in a run-down area of the city. 

That doesn’t sound like a path to a $900 million coffee brand, right? But that’s how La Colombe, which Chobani bought for $900 million last month, got its start, just as the third wave of coffee was taking shape in America (led by Starbucks’ rise in the 1990s).

The founders of La Colombe, Todd Carmichael and J.P. Iberti, met in 1987 at a Seattle grunge bar. Today, their Philadelphia-based coffee shop chain and maker of canned lattes has cafes in its home base, Philadelphia, as well as in Chicago, Washington, Los Angeles, Boston, Austin, and New York. It has thousands of wholesale customers, including many restaurants. You can buy canned lattes or cold brews in stores like Walmart and Costco, and the company sells canned drinks and beans directly to customers online via its thriving e-commerce business. 

“Coffee shouldn’t just be salt and pepper on the table,” Carmichael said of the initial vision. “We’d bring coffee to a whole new level.”

Before La Colombe — French for “the dove,” symbolizing peace in cultures and languages — Carmichael was a coffee roaster and an alum of Starbucks, and Iberti was working part-time for Torrefazione Italia, an Italian coffee company.

La Colombe’s initial business plan was rooted in a deep belief in a restaurant renaissance that would take shape in America, driven by an influx of Italian and French cuisine. La Colombe would sell coffee via cafes and those new European restaurants. And it would source the best quality coffee it could directly from farmers. 

“We sampled hundreds of types of coffee,” Carmichael said. “Our business model was trying to appeal to chefs — selling to restaurants. We’d say, ‘Chef: Coffee is a spice,’ and we sold them,” despite much higher prices than competitors. 

Carmichael and Iberti traveled to Italy and France to taste some of the world’s best coffee, which informed their own flavors. They bought roasting equipment, grinders, and accessories in the south of France and Northern Italy. They brought all of their expertise to Philadelphia, an interesting choice to open a shop — location, of course, can make or break a business. But they chose Philly because it didn’t yet have any coffee competition, unlike Seattle and New York. 

“We loved the city’s architecture, layout, and walkability,” Iberti said. “There were very few cafes, and we saw a city with great bones. Also, the proximity to New York City.”

The business partners went door to door, talking to chefs at Philly’s best restaurants. They roasted in the middle of the night at their cafe. Later, they traveled to El Salvador and Haiti to visit coffee farmers.

Now, La Colombe has several Philadelphia cafes and, nationally, it has grown to 32 cafes in six states and DC, plus launched a canned beverage line and other retail products — the latter being the real reason it’s worth nearly $1 billion.

By 2007, La Colombe decided to expand with cafes in New York. Chicago and Los Angeles followed. But the cafes aren’t what jolted the brand.

Although a private equity firm wanted La Colombe to expand its cafe footprint, Carmichael and Iberti disagreed. Instead, they were fascinated with cold brew and the idea of putting coffee in a bottle and then selling it nationwide in stores. That’s how they scaled quickly.

It’s the crown jewel of La Colombe’s growth in the 2010s: the bottled cold brew and its Draft Latte, a ready-to-drink (RTD) product that vaulted the company from a chain of cafes to the fastest-growing ready-to-drink company in the U.S. La Colombe’s vertical integration — running every step of the journey from sourcing the beans to roasting and packing — also keyed its growth.

There’s a science to how it keeps its canned lattes so tasty and foamy, which Carmichael notes is a result of several design decisions, including a special valve with a “chimney-like” design that doesn’t expose the latte to air. Rather, the valve expands the latte to allow a pin to inject the nitrous oxide without compromising the quality of the coffee.

The cans have been a big hit. You might find them at gas stations, grocery stores, and cafes nationwide. Founders estimate they can get their cans in two of every three grocery stores. 

What does all this mean? The La Colombe story illustrates the role of chance in business, markets, and life: Iberti says half of their success is rooted in luck — a decision here, a lucky break there, and so on. Plus, La Colombe benefited from macro tailwinds propelling the coffee industry forward.

“Had I not gone to (the dive bar) that night, there’d be no La Colombe,” Carmichael said. 

For more, check out La Colombe’s website or watch how their famous draft latte is made.

Enjoy reading this newsletter? Forward it to a friend.

Was this newsletter forwarded to you? Sign up here.

Use the promo code STOCKS15 at checkout for 15% off our popular course “How To Get Started With Stocks.”

Partner with us.

Follow us on Twitter.

Keep an eye on your inbox for our newsletters on weekdays around 6pm EST and on weekends. If you have any feedback for us, simply respond to this email.

You can also leave your comments/suggestions/feedback anonymously here.