Peet’s Tea & Coffee Acquires Intelligentsia

It happened late on Friday. If Peet’s initial move into world of third wave coffee made ripples and got the industry talking then their second flipped everything upside down.

In case you were unaware, Peet’s Coffee & Tea have they have acquired a majority stake in the Chicago-based chain and purveyor of all things speciality, Intelligentsia.

At the time of publication financial details of the deal have not been released, but it is known that Intelligentsia’s co-founders will retain what has been called a “significant stake” in the business. It’s a deal that in many respects mirrors the one signed when Peet’s purchased a similar majority stake in Stumptown just a few short weeks ago.

Intelligentsia is well-known in the industry for popularising direct trade with coffee farmers and offering high quality, single-origin coffees, as well as their highly rated coffee shops and roasting facilities in Chicago, New York and Los Angeles. Founded in 1995, they’ve become one of the most respected brands in the sector. And predictably, they’ve come under some flack on social media for “selling out” to a big corporation.

In response, co-founder Doug Zell had this to say: “We’ve taken something that’s commodity and turned it into something culinary. In our roasting quality assurance, we’re going to have more tools to make it better.

“Nothing is changing in what we do.”

But (again) it’s a case of Peet’s buying in.

“This is one way for them to wedge themselves into specific markets they might not have penetrated with their traditional stores,” commented Andrew Alvarez, an analyst from research firm IBIS World to the Los Angeles Times

It would be foolish to decry the move because much like the deal with Stumptown, Peet’s will be relatively silent partners to Intelligentsia, offering the third-wave chain scale, buying power and potentially an easier way to expand their presence in other strategic cities in the United States.

It’ll probably a win-win situation for both companies.

Let’s not forget too that Blue Bottle have also attracted multi-million dollar investments recently and that Peet’s main owners, JAB Holdings, also oversee Caribou Coffee and a percentage of Jacobs Douwe Egberts.

photo: Scott Beale / Laughing Squid (Creative Commons)