Chobani investment brings $1.2 billion milk plant to Pa.

Chobani investment of $1.2 billion over five years will turn an Allentown plant into a high-protein milk base by summer 2027.

The closely held yogurt maker said it will take over a facility and warehouse from Keurig Dr Pepper in Allentown, Pennsylvania. The deal expands Chobani beyond Greek yogurt and creamers into a milk category already shaped by Coca-Cola’s Fairlife brand.

Allentown plant changes hands

Keurig said Chobani will pay about $125 million for the plant and warehouse, with the transactions expected to close in the third quarter of 2026. Chobani will initially make some Keurig products at the site before adding its own dairy production.

The companies said Keurig will keep some Allentown employees and Chobani will offer jobs to the remaining workers at the facility. The arrangement gives Chobani a large operating base without waiting to build a plant from scratch.

The site covers 1.5 million square feet and is expected to start production next year. Chobani plans up to 10 production lines there, and the company said full capacity would require more than 3 billion pounds of Pennsylvania milk a year, equal to about 30% of the state’s output.

Pennsylvania Governor Josh Shapiro called the project “the largest private-sector investment in the history of Pennsylvania’s agriculture industry” and said it would strengthen the state’s dairy sector. The size of the milk requirement makes the plant a demand test for local farms as well as a manufacturing expansion.

Protein milk broadens Chobani

Chobani is using the Allentown plant to move deeper into high-protein foods, a category that has benefited as consumers seek products with simpler labels and higher protein content. The company said its new milk will reduce sugar and remove water to raise protein levels.

Hamdi Ulukaya, Chobani’s founder and chief executive officer, said the company enters categories where it believes it can change the product offer. “Our goal is every time we enter a category, we see there’s an impact we can make and disrupt,” he said, adding that milk fits demand for “natural, good, nutritious food.”

The push follows a period of fast growth. Chobani said sales volume has grown 20% annually over the past three years, while Ulukaya said 2026 sales are on track to reach about $4.6 billion.

Instacart data showed Greek and Icelandic yogurt sales on its platform rose 8% from a year earlier in the first half of 2026. That growth gives Chobani a base of protein-focused shoppers as it prepares to challenge established milk brands.

La Colombe stake unwinds

A second part of the transaction cuts Keurig’s ownership link to Chobani’s coffee business. Chobani said it will pay $800 million to repurchase an equity interest Keurig received when Chobani bought La Colombe in late 2023.

Keurig had bought a 33% stake in La Colombe earlier in 2023 for $300 million. Keurig said it plans to use net proceeds from the new transactions to reduce debt as it prepares to separate its coffee and cold-drinks operations into two independent companies.

The companies are also expanding a distribution agreement covering La Colombe ready-to-drink lattes and Chobani’s planned high-protein milk. Keurig Chief Executive Officer Tim Cofer said the transactions reflect the partnership’s success and align the Allentown site with an owner focused on dairy growth.

Chobani’s Pennsylvania spending sits alongside other capital projects. The company said last year it planned more than $1 billion for a dairy processing plant in Rome, New York, and it is also investing in Twin Falls, Idaho, and Norton Shores, Michigan.

Ulukaya said Chobani is ending oat-milk production to free capacity for products with stronger demand. If high-protein milk gains shelf space, Chobani gets a larger addressable market, dairy processors get another large buyer, and consumer staples companies face more pressure to rework legacy dairy lines.

If protein demand cools or milk supply costs rise, the same plant could carry lower returns and tighter margins for Chobani. If demand holds through the 2027 launch, the Allentown site could tie Pennsylvania dairy supply more closely to national grocery trends while giving Keurig cash for its planned breakup.