Mere weeks after acquiring Portland’s Stumptown Coffee Roasters, Peet’s Coffee & Tea today announced a majority acquisition of yet another heavyweight company at the forefront of coffee’s quality-obsessed “Third Wave” movement, Chicago-based Intelligentsia Coffee & Tea.
Founded in 1995 by Doug Zell and Emily Mange, Intelligentsia has helped popularize trends such as direct trade with farmers and single-origin coffee offerings among quality-focused roasters, while developing upscale retail cafés in Chicago, New York and Los Angeles, with roasting facilities in each region. In today’s joint announcement, the companies said Intelligentsia will continue to operate independently, yet with “full access to Peet’s resources and scale.” It is nearly verbatim the language used when Peet’s announced its Stumptown acquisition.
It was rumored earlier this month that Intelligentsia was in talks with private equity buyers. Peet’s, considered a pioneer in its own right in specialty coffee’s “Second Wave” movement, is owned by the Luxembourg-based investment group JAB Holding Company following a $1 billion deal in 2012. (note: A previous version of this story referred to JAB as Joh. A Benckiser. The company was officially renamed JAB Holding Company in 2014.)
We’ll have more as this story develops, but here is the meaty part of today’s announcement:
Peet’s Coffee & Tea and Intelligentsia Coffee today announced an agreement in which Peet’s will acquire a majority stake in Intelligentsia, the pioneer of the third wave coffee movement. Intelligentsia will continue to operate independently and have full access to Peet’s resources and scale. Intelligentsia co-founders Doug Zell and Emily Mange as well as co-owner Geoff Watts will retain a significant stake in the business and stay actively involved in the company’s operations. Peet’s will continue to pursue its growth strategy across its retail cafes, wholesale and grocery. Terms of the transaction were not disclosed.
“We’re excited to welcome Intelligentsia to the Peet’s family as the growth of the super-premium coffee market continues to explode in the U.S.,” said Dave Burwick, president and CEO of Peet’s Coffee & Tea. “It’s driven by 18-34 year-olds who are more affluent, purchase premium brands from other categories like craft beer and pressed juice, and seek variety and new experiences. To capture more than our fair share of this market, it’s important that we offer differentiated craft coffee brands with unique propositions and appeal. Peet’s and Intelligentsia, along with Stumptown, which we recently signed an agreement to acquire, are highly complementary brands and businesses that collectively satisfy the desires of the new coffee connoisseur.”
Intelligentsia, founded in 1995 by Doug Zell and Emily Mange, is a super-premium coffee roaster and innovative retailer based in Chicago with roasting operations in Chicago, Los Angeles and San Francisco. With 10 coffee bars across Chicago, Los Angeles and New York, Intelligentsia is known for its Direct Trade coffees, culinary coffee experiences and education.
“Intelligentsia is built on the vision of creating a remarkable coffee experience,” said Doug Zell, founder of Intelligentsia Coffee. “Each step of the process is considered and is as important as the step that preceded it. It begins at the source, working alongside the best producers in the world, moves through our thoughtful coffee roasting and quality assurance, and lands in the hands of the most well trained and skilled baristas that deliver our carefully crafted coffee to our customers. Also, Peet’s respects our vision and shares our same values. Emily and I both spent many years in the Bay Area and watched first-hand as Peet’s scaled their business while staying committed to their quality and craft. Peet’s is where I started my career in coffee and I’m delighted to be working with them again.”
Peet’s, Intelligentsia, and Stumptown have a number of the world’s most renowned coffee experts and pioneers in Doug Welsh (Peet’s), Doug Zell (Intelligentsia), Geoff Watts (Intelligentsia) and Duane Sorenson (Stumptown). “There are no individuals in the world who know more about coffee sourcing, roasting, trends or the coffee consumer than our team, and we are thrilled to have them help guide our growth in the years ahead,” added Burwick.