While the illustration above pretty well sums up what many in the trade think Stumptown has done, the only thing that surprises me about this news (you can read more here) is that it's taken this long.
Dare we hope that Portland and environs finally gets some coffee that's actually seen the inside of a drum roaster past first pop? Probably not, but joking aside Peet's scale and tremendous sourcing expertise, access to capital and infrastructure will be huge plusses for Stumptown.
Of course cold brew is the main reason given for the buy, but what one wishes Peet's would get out of this, in carefully reviewing Stumptown's marketing of its coffee, is a reminder of the focused, product-driven and passionate company it itself once was and could be again. Unfortunately the legendary Berkeley-based firm has utterly and totally lost its way, going from a product-driven purist of the highest order to a faltering, unfocused marketing-driven machine with said marketing reflecting no discernible strategy or position. In selling their souls they didn't even get a good price and went out with a whimper not a bang.
The procession of boneheaded moves in recent years at Peet's is beyond counting, but includes acknowledging third wave farm-to-cup positioning by disclosing the name of exactly one farm (San Sebastian in Antigua) on its menu board; halfheartedly offering a couple of medium roasts and exactly one light one after three decades of "deep" roasting; utterly abandoning even the pretense of having the quality of the non-coffee items sold match that of the coffee; and most recently trashing one of the best whole leaf tea brands in American retail history in favor of flavored crap under the Mighty Leaf label.
Here's hoping they do indeed leave Stumptown alone as they've said they'd do (of course Starbucks said the same thing about The Coffee Connection and we all know how that turned out).
Stay tuned for further mergers and acquisitions.
100% agreement on that first paragraph
ReplyDeleteSo is it just about the revenue from Stumptown's RTD cold brew product? What else could Peet's get out of this?
ReplyDeleteHi David - It seems to me there are plenty of possible benefits for both companies. The group that owns them also owns Douwe Egberts/Jacobs and Caribou, so they now have a portfolio of brands that is worldwide in scope and runs the gamut from high-quality conventional roasted & ground coffee to, in Stumptown, the cutting edge of Third Wave offerings.
ReplyDeleteStumptown seems to me to have an excellent chance of much continued growth now that it's no longer limited in its access to capital. Hopefully Peet's will help them grow out of the "hub and spoke" (roastery in each market they have stores) model because they have major problems with whole bean coffee freshness as a result of it. Stumptown also ought to be helped greatly by Peet's logistics capabilibies and their enormous (comparatively) green coffee purchasing power and sourcing expertise. As I wrote in the article, if Peet's can be disciplined enough to leave S'town alone on the marketing and execution side it could be a total win for all concerned.
Hi Kevin. Stumptown, as you know, first sold out (90%) to the highest bidder, TSG (a private equity company), in 2011. This transaction seemed to fly under the radar of many of the hipster Stumptown fans that idolized its seemingly anti-corporate values and practices. So this recent purchase by Peet's, demonized as a soulless corporate Starbucks twin by these same hipsters, should come as no surprise.
ReplyDeleteMaybe the result of this buyout will be more Stumptown stores serving Stumptown coffee and more quality full city Peet's coffee offerings (I'm doubtful about this one). One can hope anyway :).
Hi Jordan
ReplyDeleteThanks for reminding us of the TSG venture capital investment in Stumptown. As I recall there was a lot of local (Portland) hand-wringing then as well. I hope both companies learn from each other and thrive.
http://www.reuters.com/article/2015/10/30/us-intelligentsiacoffee-m-a-peets-idUSKCN0SO24220151030
ReplyDeleteKevin,
ReplyDeleteI just discovered your blog after searching around for anybody that understood Peets. I was at the company shortly after they went public in 2001. I stayed at the roastery till just after they pushed Jerry and Jim out in around 2006. They were tumultuous times to say the least. I was the Lead Machine Technician(installed and maintained roasters and packaging equipment) and started the quality control lab for the packaged coffee.
I was in love with the coffee, and still really can't enjoy any other roasts like I do Peets. I moved to Oregon after leaving Peets and was introduced to Stumptown, as all the coffee shops in my town were serving it. After nearly ten years of either ordering Peets or being disappointed, I just started home roasting so I could get something roasted beyond full city. As I started looking for information on roasting all I seem to find is talk about light roasted Central American coffee, as if that is the pinnacle of coffee.
I don't agree with most of the things that have happened at Peets in the last 15 years, and Alfred is most definitely rolling over in his grave, but I know they still source amazing coffees, and the roasters are still hand roasting on their old Probats, some of who have been there close to 25 years now(the roasters, not the machines!).
I know this is kind of a rant, but I just wanted to say I hope Peets can be a good influence with Stumptown, with sourcing and roasting, so more people might enjoy the style Alfred brought to us.
Thanks for your insightful blog.
Dan
Hi Dan,
DeleteThanks for your thoughtful comments. It's such a pleasure to hear from someone who really knows Peet's and lived through so much change there.
I'm drinking a cup of their new Big Bang blend at the moment, and of course I agree with you wholeheartedly. Peet's continues to buy large quantities of phenomenal coffee, and while I don't know all of the players on the green coffee side there anymore I have the utmost respect for Doug Welsh and of course Elliott Jordan on the tea side. I know from my own experiences at Starbucks and Allegro how challenging it is to be a product-driven person in a company that goes from being product driven to marketing driven.
While I'm not a fan of any number of boneheaded innovations at Peet's in recent years I will still happily drink their Sulawesi, Kenya, Ethiopia Super Natural, Aged Sumatra and any number of limited edition offerings over any of the godawful cinnamon-to-light-city roasted stale swill on offer from the leading Third Wave purveyors.
As Jim Reynolds himself pointed out years ago, the best (and now only) way to experience what Peet's is capable of is through mail order, where the best coffees are still roasted to order and sold at realistic prices. Unfortunately you can't reliably buy anything else - from brewing equipment to chocolate to (sadly) tea - but the the coffee is still phenomenal and as you say the roasters understand their craft and practice it at a level that few can appreciate.
Thanks again for your comments, and every good wish. And yeah - here's hoping some of the Peet's know-how, especially about roasting, rubs off on Stumptown.