Peet’s Coffee & Tea Sold For $1 Billion To Private Investment Group
Peet’s Coffee & Tea Inc., which was owned by Starbucks in the 1980s, is being acquired by Joh. A. Benckiser, the investment vehicle for Germany’s Reimann family, for about $1 billion in cash and will take the company private. The deal is expected to close by October. Peet’s is a small coffee retailer based in the San Francisco Bay area.
The Wall Street Journal reports that Peet’s has struggled with higher coffee bean prices lately. According to WSJ, “analysts have said Peet’s has a lack of pricing power at grocery stores as it already sells at a premium to other brands.”
Peet’s Coffee & Tea concentrates on the bagged coffee space and thus far is not involved in the profitable single-serve market.
Peet’s Coffee & Tea and Starbucks have an interesting interrelated history, according to Reuters:
Peet’s was started by Dutch immigrant Alfred Peet in 1966.
According to the company, Peet trained the founders of Starbucks and supplied that company’s first store with Peet’s fresh-roasted coffee beans in 1971.
Peet retired in 1983. A year later, Starbucks bought Peet’s and its four stores in the San Francisco Bay Area. In 1987 Jerry Baldwin, a Starbucks co-founder, and others sold that company, and Baldwin stayed with Peet’s.
Peet’s went public in 2001 and operates stores primarily in California with shops in a few other states. Its products are also sold in thousands of grocery stores and online. The company website states that “Peet’s Coffee & Tea offers superior quality coffees and teas in multiple forms, by sourcing the best quality coffee beans and tea leaves in the world, adhering to strict high-quality and taste standards, and controlling product quality through its unique direct store delivery selling and merchandising system. ”
The Peet’s Coffee & Tea existing management team in the Bay area will remain in place after the sale goes through. Peet’s home office is located in Emeryville, Calif., while its “roast to order” operation is based out of a facility in Alameda.
Reuters observes that the acquisition “will give Peet’s a financial jolt as it competes against larger coffee and tea shops and will broaden the reach of Germany’s Reimann family in the coffee business.”