La Colombe Coffee Roasters: Todd Carmichael and J.P. Iberti. A Brotherhood Built on Coffee (2020)
Timestamps are as accurate as they can be but may be slightly off. We encourage you to listen to the full context.
Podcast Summary
When Todd Carmichael and J.P. Iberti met at a grunge concert in Seattle in the 1980s, they were an unlikely pair who shared a love for great coffee. This episode tells the story of how these two friends co-founded La Colombe in Philadelphia and went on to play a leading role in the third wave specialty coffee movement in the US. (11:22) Their journey took them from learning barista basics to sourcing directly from coffee farms worldwide, ultimately building a company valued at around $900 million before being acquired by Chobani.
- Main Themes: The episode explores entrepreneurship, persistence through challenges, the evolution of coffee culture in America, and how two friends built a coffee empire through quality, direct sourcing, and innovation in cold brew products.
Speakers
Todd Carmichael
Todd grew up in Eastern Washington State in a family struggling with poverty and mental health challenges, with his bipolar mother working as a cocktail waitress in truck stops. He earned a full scholarship to the University of Washington for cross-country running, despite having received a limited education due to frequent moves. After graduating and working briefly as a tax consultant, he spent three years in Europe saving money to start La Colombe with JP.
J.P. Iberti (Jean Philippe)
JP was born in Nice, Southern France, where his father ran a successful business supplying fresh meat and produce to restaurants. He came to Seattle to attend flight school through connections with his sister who had married an American from Seattle. He became skilled at coffee roasting while working at Torre Faison Italia in Pioneer Square, eventually becoming a central figure at the renowned coffee shop before co-founding La Colombe.
Key Takeaways
Quality Over Volume Creates Market Differentiation
Todd and JP positioned their coffee as a premium product by focusing on quality over quantity, charging significantly more than competitors. (24:26) When they entered the Philadelphia market, coffee wholesale to restaurants was about $1.50 per pound, while La Colombe charged mid-$7s. They succeeded by explaining to chefs that "coffee is a spice" - like saffron, you can buy cheap versions that require large quantities or premium versions where a small amount delivers exceptional results. This strategy allowed them to build sustainable margins while serving the most discerning customers.
Direct Sourcing Creates Competitive Advantages and Ethical Impact
Rather than buying through brokers and middlemen, Todd and JP traveled directly to coffee farms around the world to source their beans. (53:45) This approach allowed them to ensure quality, build relationships with farmers who were getting fair compensation, and secure access to the best beans before competitors. The process required understanding complex international logistics and supply chains, but created lasting competitive advantages through exclusive relationships and superior product quality.
Strategic Focus Prevents Dilution of Core Strengths
When private equity investors wanted La Colombe to rapidly expand to 200 cafes, Todd and JP recognized this would dilute their focus from innovation. (62:18) Instead, they chose to buy out the investors and focus on developing cold brew products and ready-to-drink innovations. This decision proved crucial - their draft latte cans are now in approximately two-thirds of US grocery stores, creating a much larger revenue stream than 200 cafe locations ever could have.
Mental Health Challenges Require Proactive Management
Todd took a three-month sabbatical to a remote Pacific island when he recognized he was suffering from severe anxiety and potential bipolar symptoms. (53:50) Rather than pushing through and potentially damaging himself and the business, he was transparent with JP about his struggles and took time to reset. This decision, supported by JP's understanding, allowed Todd to return as a healthier leader and prevented what could have been a much more serious breakdown.
Authentic Partnerships Require Mutual Sacrifice and Trust
The partnership between Todd and JP succeeded because both were willing to make significant sacrifices for each other and the business. When Todd needed mental health support, JP ran the company alone without hesitation. (56:59) When they needed to buy out problematic investors, they found an aligned partner in Hamdi Ulakaya of Chobani who shared their values around craft and community. Their 30-year partnership demonstrates how authentic business relationships require putting the partnership above individual interests.
Statistics & Facts
- Coffee wholesale to restaurants was approximately $1.50 per pound when La Colombe entered the Philadelphia market, while they charged mid-$7s per pound - nearly 5 times the market rate. (24:26)
- La Colombe's draft latte cans are now available in approximately two out of three US grocery stores, representing massive distribution reach for their ready-to-drink products. (66:20)
- The company was valued at around $900 million before being acquired by Chobani, according to the episode introduction, demonstrating the massive value created from their humble beginnings in a small Philadelphia storefront. (03:56)
