Caffeine coming home

Much speculation these days of Peets (est. 1966 Berkeley) being acquired by Starbucks (est. 1971 Seattle). It's a logical move as this would provide Starbucks with more diversity; sort of a Starbucks Bold blend, and Peets with more market (visibility and market shares). My interest is having been with Peets for nearly ten years ('98-07) before it was controlled by shareholders, before syrups and vendors with 1-800 #'s, before it was diluted (less coffee per water ratio).

Currently the spin makers at Peets are most likely detailing a plan to deal with anger and appeasement; something to the tune of : don't worry, we're not changing our culture, we're changing their culture. This will allow us the opportunity to bring our artisan coffee to more people and allow you to enjoy Peet's in more places across the world. Coffee with Khadaffi, perhaps. I would not foresee any radical changes, as over time, these have already happened.

Whether intentional or not, it seems to me that both sides have been slowly planning on this saddle up sally alignment for some time. Starbucks now offers its Pikes Peak roast, a throwback to an original blend and a bolder (fuller body, thicker) than their normal blends. Who helped create the first Starbucks roast? Why, no other than Alfred Peet himself. More later.
In the last four years Peets has made their urn coffee in their shops uniformed and more watered down. For many years when you got a cup of coffee at Peets, it might keep you buzzing for hours. It was as strong and full, possibly stronger than cups you can get today at Blue Bottle or Philz. Four years ago i did the math and had the precise figures but this should still be fairly accurate: Used to be 1.3 pounds of coffee to 220 oz. of water. Now 1 pound of coffee to 198 oz. of water. The excuse is that smaller batches are made to keep the coffee fresher but truth is, less coffee is used per water, and in the morning rush hours, our store was making a fresh batch every 10 minutes.

When we used to pride ourselves on the differences between us and them, I was once disheartened to attend a managers meeting where a regional manager spoke at length about how we need to embrace the Starbucks business model, how we should want to be like them. No matter that he was later terminated due to some harassment issues; he was speaking honestly with an inside to how the business was being run. Not unlike the music business where the music, or the coffee (and tea)once mattered most- once the marketing and spin doctors take over- profits increase as becomes the primary focus. The product becomes more generic and the spin/marketing becomes bold: If it's not Peet's, it's not coffee (an actual marketing campaign).


Quick History and how the companies are related:
In 1966 Alfred Peet started Peet's Coffee, Tea an Spices in Berkeley. No espresso drinks. A few years later business partners, coffee aficionados, academics Gerald Baldwin, Gordon Bowker and
Zev Siegel approached Peet to learn the business. He agreed to show them but with the agreement that they would not open their business in the Bay Area. In 1971 Starbucks was born in Seattle. As it followed the Peets plan, Starbucks did not make espresso drinks, just selling beans, cups of coffee, and hardware. Starbucks purchased coffee from Peet's the first year, and the first Starbucks in Pikes Place is noticeably brown, not green. In 1984 Baldwin and Peet's roastmaster, Jim Reynolds purchased the four Peet's stores.

In 1987 Baldwin and Bowker (Siegel had dropped out in 1980) decided to sell Starbucks to a newer partner, Howard Schultz -who with his investors had a plan of massive growth. Baldwin wanted to settle in the bay area and focus on Peet's. Bowker would soon begin Redhook Brewery. Starbucks went public in 1992 and Peets followed in 2001. Up until 2001 Peets employees could not wear a logo shirt of any kind, not even a Peet's shirt. Beginning with the horrid IPO (public offering of stock purchase) tshirts that all retail employees were told to wear, that all changed.

In my experience at Peets, I appreciated that full health benefits were granted to part time employees who maintained at least 21 hours of work a week and enjoyed the craft and culture of fine coffee and teas. It seemed that several people were in place with a direct lineage to Alfred Peet- roast masters Jim Reynolds, John Weaver, Doug Welsh, Tea Guru Eliot Jordan and certainly, Jerry Baldwin. It wasn't until Pat O'Dea (Mother's Cookies, Procter and Gamble, Sunny Delight beverages) was brought in as CEO in 2002 and noticeably changes were made in the next few years eliminating local vendors: Clover, neighborhood linen companies, small pastry vendors, coffee repairs- all turning to companies with 1-800 #'s, or national chains. Peets began to show up at every corner in upper class neighborhoods, in airports, in grocery stores. The emphasis of stores where the accountability of quality is not measured as strongly as the accountability in profit. And even with that, a business model that more stores generate more profit. And more expenses (save expenses by cutting payroll, perhaps extending the shelf life of the coffee). Jerry pretty much left the day to day to focus on his vineyards, with Jim following. John Weaver left in '07 .