Ready, Fire, Aim! - Mihail's Public Blog: The Apple of coffee

Friday, June 3, 2005

The Apple of coffee

I always felt that Peet's was too strong a coffee for my taste, but a friend's recent "duh!" suggestion that I ask for fewer shots in my latte, has me hooked like never before. The coffee is good, it is consistent, it is all about community -- all the things where Starbucks has stumbled and is trying to address as I've noticed in several stores in the last month.

I'm the kind of person who used to feel all warm-and-fuzzy about a Starbucks and its logo from miles away. But here I am treating myself to Peet's when I don't need a WiFi connection and don't need to hang out (since older Peet's stores don't have much seating...an aspect that is starting to change). According to this timely New York Times story (registration required) which calls Peet's the "Apple Computer of coffee" for its small in number but intensely loyal customers:

While Peet's has accelerated the opening of its retail stores, the company's business is built around selling beans, not drinks. Sales of whole beans account for 45 percent of Peet's retail revenue, compared with 5 percent at Starbucks.

...Compared with Starbucks's 6,605 stores in the United States and an additional 2,656 abroad, the Peet's operation is about as noticeable as a fly on an elephant. Peet's operates just 99 outlets, up from 75 at the beginning of last year. It expects to open another 20 this year.

I've always known there was a connection between the two coffee chains but now I understand exactly how:

The company began operations in Berkeley in 1966, when Alfred Peet, a Dutch immigrant, opened his first store. A few years later, Mr. Baldwin and two partners opened their own coffee shop in Seattle, and contracted with Mr. Peet to supply their store with beans.

They called their store Starbucks, and gradually expanded it to five stores. In 1984, the Starbucks partners bought the small Peet's chain. Three years later, believing that Peet's epitomized their zeal for coffee, they sold Starbucks to Howard Schultz.

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