Peet's Coffee & Tea enjoys the daily grind. The company owns and operates about 195 coffee shops in California and half a dozen other states offering java lovers about 25 types of whole bean and fresh ground coffee, including about 15 blends. Its teas run the spectrum from India black to herbal blends. The stores also offer freshly brewed coffee, biscotti, and other pastries, along with mugs and brewing equipment. In addition to its retail operation, Peet's sells coffee through retail grocery chains such as Safeway and Whole Foods, and through its own online mail order operation. The company, which also supplies coffee to foodservice operators, was acquired in 2012 by privately-held Joh. A. Benckiser.
Joh. A. Benckiser is a privately held group focused on long term investments in premium brands in the consumer goods category. The firm paid about $1 billion for the coffee shop chain and its assets. As a result of the transaction, Peet ceased trading on The NASDAQ Stock Market and became a private company.
Unlike its chief rival Starbucks, Peet's has built its chain without the aid of franchising or licensing. The strategy allows the company to have greater control over its local operations, but it has meant slower growth than franchised concepts. Peet's has opened relatively few locations in recent years while closing several underperforming stores.
The coffee shop business in the US has evolved from just selling coffee to marketing a consumer lifestyle. Peet's targets roughly the same upscale and urban demographic as Starbucks and other chains while promoting its concern for the environment and sustainable coffee agriculture in places like Nicaragua. The company also sees its stores as serving an educational role, exposing customers to new flavors and types of beverages.
While its coffeehouses continue to anchor the business, Peet's has been focused on expanding its grocery and wholesale distribution business, which accounts for about 40% of sales. An attempt to purchase coffee wholesaler Diedrich Coffee was thwarted in 2010 by rival Green Mountain Coffee Roasters, however. Both companies were attracted by Diedrich's lucrative manufacturing of K-Cup single serving portion packs, produced under license for Keurig's popular brewing system. (Keurig is a subsidiary of Green Mountain.) Peet's had offered more than $210 million to purchase the company.
Peet's namesake, Alfred Peet, founded the company in 1966. Starbucks' co-founders Gerald Baldwin and Gordon Bowker bought the company in 1984. (They sold their stakes in Starbucks in 1987.) – less