News broke this morning via press release that Intelligentsia Coffee—a Chicago-based specialty coffee company founded in 1995 by Doug Zell and Emily Mange—had been acquired by Peet’s Coffee & Tea, a specialty coffee brand founded in Berkeley, California in the 1960s and acquired by German-based JAB Holding Company in 2012.
If you’ve been living under a coffee news rock for the last 30 days, you’ll recognize Peet’s as the very same brand that moved to acquire Stumptown Coffee earlier this month. Long rumored, oft-predicted, we are all now taking a front row seat as the architects of Third Wave Coffee strike major deals worth hundreds of millions of dollars. This is not us joshing about Coca-Cola in 2011; this is actually happening.
In the wake of this morning’s news, Sprudge co-founder Zachary Carlsen secured a telephone interview with Intelli co-founder Doug Zell, who published an open letter on the company’s web log earlier today. He also spoke with Tyler Ricks, CMO at Peet’s Coffee & Tea.
Hello Doug Zell.
Doug Zell: “Hey! I’m just jumping in the car, in the process of visiting the coffee bars.”
This is an exciting morning. Thanks for answering my questions. How long has this deal been in the works?
This has been in the works for a while. Six months to get to here.
Will the existing Intelligentsia cafes continue to operate as normal following this acquisition?
Yes. Our whole operation really stays the same, and just grows. Nothing is changing in what we do.
Does this news mean you’ll be expanding soon into new markets?
The plan is that we got San Francisco slated for the second quarter of 2016. We’re in Los Angeles and New York. We want to look at other major markets going forward. Yes, we want to open in new markets, but not in the expense of training and quality.
How will these acquisitions effect your sustainable sourcing efforts?
Nothing about what we do in terms of sourcing direct trade is going to change. As we grow we’re going to continue to buy great coffees from the best producers in the world. We’ll be able to cast a wider net with the muscle and resources of Peet’s.
What do you say to those who say, “Intelligentsia sold out!”—or to those who are calling this the end of Third Wave Coffee?
Of course everyone is entitled to their opinion. This really just allows us to pursue our mission even further. 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. The reason we got here was because of our focus on quality day in and day out in our shops. That’s not going to change.
We’re finally reaching the audience we set out to reach. A wider audience, people who are just starting to learn about this coffee. More people are going to drink better cofffee and better prepared coffee. Everyone along the chain is going to benefit.
Tyler Ricks, on behalf of Peet’s, let me ask you—why did you acquire Intelligentsia?
Tyler Ricks: “Those principles Doug is describing, we hold them dear at Peet’s as well. These are two like minded brands that come together. We share a lot of the same principles. We both hold coffee in a certain place. This isn’t about two brands that come from very different places coming together.”
First Stumptown, then Intelligentsia in the same month. What coffee brand is Peet’s going to buy next?
We’ve been busy. We need a little bit of break, probably? We’re super excited with where we are and what we’ve accomplished with these two great partnerships. There’s strategy here.
I won’t say that there won’t be anything in the future, but right now we have a portfolio of three of the best coffee companies in the world. We’re assembling a powerful portfolio of premium brands. How do we put together the best roster of premium coffee brands in the world and how do we capture those great coffee minds? We have a long history of that here at Peet’s with Alfred Peet. Duane [Sorenson, Stumptown founder] and Doug are that next tier, that next wave. We’re excited about where it’s going but we’re not interested in rolling it up in one big brand.
Zachary Carlsen is a co-founder and editor at Sprudge.com. Read more Zachary Carlsen on Sprudge.
Full disclosure: Intelligentsia is an advertising partner on Sprudge.
Update: An earlier version of this piece misidentified the interviewee as Dave Burwick of Peet’s, instead of Tyler Ricks. We regret the error.
