Chobani to spend $1.2 billion on Lehigh Valley plant, with 900 jobs promised over five years

Chobani will invest approximately $1.2 billion over five years in a 1.5 million-square-foot manufacturing and warehouse campus in Pennsylvania's Lehigh Valley, buying an existing Keurig Dr Pepper plant and pledging more than 900 jobs. At full capacity, the site is expected to source more than three billion pounds of Pennsylvania milk annually, equivalent to roughly 30 percent of all milk currently produced in the state.

The hiring is not immediate and the site is not empty. Chobani is acquiring KDP's facility at 7356 Industrial Boulevard in Upper Macungie Township, which opened for production in 2021, along with its equipment, lease and operations for about $125 million. The 900 full-time positions are to be created over the next five years, according to the Shapiro administration's announcement, and production under Chobani is expected to begin in 2027.

The workers already there are being split. Employees in delivery, customer service and other corporate functions stay with KDP, while Chobani intends to offer employment to the site's manufacturing and warehouse staff, according to KDP's statement, which cited the value of the trained workforce and operational continuity. Chobani will keep making certain products for KDP at Allentown for a defined period after the sale under a co-manufacturing agreement, so the plant's near-term output, and the labor it requires, is partly contracted to its former owner.

The plant sale is the smaller half of the transaction. KDP is selling its full equity stake in Chobani back to the company for $800 million, taking $925 million in pre-tax proceeds across both deals and applying the net proceeds to debt reduction as it prepares to separate into a beverage business and a global coffee business. The transactions are expected to close in the third quarter of 2026, subject to customary closing conditions.

Pennsylvania is paying to make the site work. The Commonwealth will provide $50 million in loans and grants through its PA SITES program for infrastructure and site improvements, and Chobani may be able to access tax credits later through the Pennsylvania Milk Processing Tax Credit under the state's PA EDGE program. The project is also being routed through the governor's Permit Fast Track program, which the administration created to compress permitting timelines for large economic development projects.

The more revealing number is the $127 million in loans and grants the state says it will continue to direct to eligible Pennsylvania dairy farmers to meet the new demand. That is state money aimed not at the factory but at the farms that have to fill it.

The scale of that supply requirement explains it. Pennsylvania has more than 4,300 dairy farms, and the administration called Chobani's expected milk demand the largest increase in demand for Pennsylvania dairy in the state's history. Absorbing a single buyer of that size points to real expansion on farms, and the state budget signed this year directs funding to the Center for Dairy Excellence specifically to help farms scale to meet increased demand, alongside $13.8 million for the Pennsylvania Farm Bill, which the administration describes as supporting business planning, infrastructure and workforce development.

What Chobani plans to make there goes beyond yogurt. The company says it will produce a multi-serve milk with more protein and less sugar than traditional milk, and use it as the base for high-protein shakes, with plans for up to 10 production lines. Chobani says it has grown approximately 20 percent annually over the past three years.

Allentown sits within 500 miles of roughly 40 percent of the U.S. population, and Chobani's distribution agreement with KDP is being broadened rather than wound down, with KDP continuing to move La Colombe ready-to-drink lattes and other Chobani beverages through a direct store delivery network the company says reaches about 80 percent of the U.S. population.

The Pennsylvania campus is one piece of more than $4 billion Chobani says it is investing across its U.S. manufacturing network, alongside a new dairy processing facility in Rome, New York, expansions in Twin Falls, Idaho, and Norton Shores, Michigan, and improvements at its original New Berlin, New York, site. Governor Josh Shapiro called the Lehigh Valley project the largest private sector investment in the history of Pennsylvania's agriculture industry.