Peet’s Coffee has been in the biz for more than 60 years and is still thriving.
While Starbucks, Nescafe, and McCafe are a few of the biggest coffee brands in the world, it appears there’s a new kid on the block. Surprisingly, this kid isn’t new and has been around since 1966, even before Starbucks. That year, Alfred Peet decided to start a beverage company- Peet’s Coffee, whose products would later travel outside America, delighting consumers globally. Today, that small venture has grown into a Unicorn that grossed $983 million in 2019 alone. Alternatively, with more than 200 stores in the U.S alone, the company currently has 5,000 employees on its payroll. Unfortunately, like many global brands, it took a lot of sacrifices for Peets Coffee to get here today. However, in this article, we will look at how the company became one of the biggest coffee franchises in the world.
Who Is Alfred Peet?
Nicknamed “the Dutchman who taught America how to drink coffee, Alfred Peet was born in the Netherlands in 1920. His father owned a small coffee company called B.Koorn & Company, which developed his passion for beverages. He continued to work in his father’s company until he moved to London and became an apprentice at Twinings. Alfred also moved within countries in the same capacity, harnessing his skills, and at a point became a tea taster. However, the turning point for him was when he moved to San Francisco in 1955 and saw that Americans drank substandard coffee. This was the inspiration Alfred needed to introduce a product and subsequently promote the most prominent coffee culture in America today.
Where it All Began – Peet’s Coffee
It took Alfred eleven years after he moved to the U.S to work for a coffee importer to begin what we know today as Peet’s Coffee. However, in April 1966, Alfred opened Peet’s Coffee as a small coffee shop in Berkley. Alfred’s aim in opening the shop at the time was to give Americans a taste of freshly made coffee. To achieve this, Alfred used high-quality roasted beans under special conditions to bring a delightful taste. Alfred began to try combinations with his military friend Key Dickson, amongst many others, to improve further. However, the try-out with Dickson birthed the now popular- Peet’s Major Dickason’s Blend.
The Subsequent Expansion – How Starbucks Came In
1971 was pivotal for the company, as Alfred opened another store in Menlo Park to further serve more customers. Alternatively, more coffee blends and combinations were available to delight the growing customers. However, it was the same year Jerry Baldwin, Gordon Bowker, and Zev Siegl approached Alfred for a partnership. This partnership involved Alfred supplying roasted coffee beans for their new business- Starbucks, while also training them. After two years, Alfred halted the supply of roasted beans to Starbucks, forcing the new company to produce theirs. Alternatively, In the same year, Alfred also trained Jim Reynolds, who became Starbucks’s roast master.
The Sales Of Peet’s Coffee
After assisting Starbucks to stand on its feet, Alfred sold his company in 1979 to Sal Bonavita. However, he continued to work for the company in a consultancy role for another four years. Surprisingly, Sal Bonavita sold fragments of the company to Jerry Baldwin of Starbucks, who later completed the entire purchase in 1987. After completing the purchase, Jerry and his co-investors sold Starbucks to focus on Peets Coffee. However, to keep the standard as Alfred’s, Jerry also sought the services of Jim Reynolds from Starbucks. With the impact of Jerry and co, the company made it into NASDAQ after an IPO (Initial Public Offering) in 2001. It sold about 3 million shares at $8 per share, amassing $26 million in revenue.
Acquisition by JAB Holding
Joh A. Benckiser (JAB) Holding bought the company in 2012 for $977.6 million, an acquisition that saw the company become what it is today. As part of its new expansion, Peet acquired Bay Area-based tea brand- Mighty Leaf Tea in 2014. The following year, the company also acquired competitors- Stumptown Coffee Roasters and Intelligentsia Coffee & Tea. The company also started to build new roasters and alternatively develop more products and coffee blends. Subsequently, Alfred’s small company opened its first shop in China in 2017 and started to spread outside the U.S. The company also shook Europe in 2020 by raising $2.5 billion via an IPO on the Euronext Amsterdam stock exchange. That raise saw Peets Coffee’s valuation hit $17.3 billion. Today, as a subsidiary of JAB holding, Peets is one of the biggest coffee brands in the world.
The original location of the first Peets coffee shop around Vine and Walnut streets in Berkeley is still very active today. Unfortunately, Alfred Peet died in 2007 in Oregon. To keep Alfred Peets’s legacy going, the company introduced a unique blend on its 50th anniversary in 2016. This blend will forever keep the memory of Alfred in the mind of coffee drinkers and reinstate the honor he deserves. Apart from the Starbucks founders, Alfred also taught and inspired many individuals who proceeded to open up their coffee businesses. Alfred is remembered not only as the man who gave Americans the perfect coffee to drink but also taught them how to enjoy it.
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