Recently it has been reported in the news that Starbucks is in a serious dialogue about acquiring Peets coffee. Followers of this blog know that I am a Peets devotee so this is personal. Everything Howard Schulz knows about coffee, he learned at the knee of Alfred Peet in his small store in Berkeley [which is now a small national chain]. The two coffees could not be more different. Starbucks coffee is designed to appeal to the masses while Peets' demographic is made up of serious coffee drinkers who like their coffee fresh, strong & undiluted. You could say that Peets has a clear Berkeley imprimatur. It's an entirely different coffee experience, which includes the coffee, the atmosphere as well as the attitude of the barristas. A Philadelphia business analyst, Mitchell Pinheiro who is skeptical about the deal clearly is not a coffee drinker because he went so far as to speculate whether or not Peetniks would even notice. He said:
"...Some "Peetniks" also are anti-Starbucks and might take their coffee dollars elsewhere, Pinheiro said, but he did not know how many people are in that group — or whether they would notice..."
Starbucks:The 'Big Mac' Of Coffee
Memo to Mr. Pinheiro: "those are fighting words!" First, most Peetniks are indeed anti-Starbucks but also his comment is sort of like saying regular customers of Morton's Steakhouse wouldn't really notice if suddenly they were served beef from McDonald's. THAT'S just how seriously we Peetniks take our coffee. To be fair, he made the comment in the context of raising a larger point about Peets national distribution system, which is an element that holds appeal for Starbucks. Even though the deal is still speculative [as of press time], what's the reaction to it among the consumers at my local Peet's? Well, to sum it up, once the shock & anger dissipates, it's "say it ain't so!"
But Is It A Good Deal
Since this is a business blog, the question remains, is it is a good deal? The answer is given that I am short on the specifics, "I don't know!" However, on its face, I really don't see what Starbucks has to gain particularly in light of the fact that they have had to close many of their own stores as a result of the economy. They are differnt brands, serving different products & demographics so it would seem that buying Peets for their distribution system is simply not reason enough. Oddly enough, there seems to be no chatter about why Peets would sell to Starbucks? What's your view?