QUICK SUMMARY
Peet’s Coffee opened in Berkeley, California, in 1966. The company originally made tea and sold roasted coffee beans rather than cups of coffee.
Peet’s founder, Alfred Peet, immigrated to San Francisco in the summer of 1955 after having lived in the Netherlands, England, New Zealand, and Indonesia. The original Peet’s Coffee location is still open and is located near the University of California’s Berkeley campus.
The influence of Peet’s Coffee on American coffee drinkers and the coffee industry as a whole is undeniable. In fact, in its early days as a company, Starbucks modeled its stores after Peet’s locations and even bought coffee beans directly from them.
Since 2012, Starbucks has owned Peet’s Coffee; however, they have allowed the company to retain its own unique craft style and flavor choices, leveraging Peet’s nearly 60-year history.
KEY TAKEAWAYS
- Peet’s Coffee does not offer franchising; locations are corporately owned or operate through licensed partnerships with existing businesses.
- There are 339 Peet’s Coffee locations in the US as of May 2024, with most situated in California.
- Peet’s Coffee products are available in over 14,000 grocery stores nationwide, extending the brand’s reach beyond physical cafes.
- Licensed partners use Peet’s brand and products, paying royalty fees, without adhering to a strict business plan, offering flexible investment opportunities.
- Peet’s Coffee saw a 12.6% increase in annual sales from 2020 to 2021, reflecting strong growth and investment potential.
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Is Peet’s Coffee a Franchise?
No, Peet’s Coffee does not offer franchising opportunities; all locations are either corporately owned or operate through licensed partnerships with existing businesses.
The company does offer the possibility for entering their affiliate program with competitive commission rates and diverse marketing materials that generate passive income for the entrepreneur. These arrangements are referred as licensed partnerships.
Additionally, Pete’s creates opportunities for collaboration by allowing individuals to notify them of coffees and other products and goods they have created for consideration as part of Peet’s Coffee’s various offerings.
How Many Peet’s Coffee Locations Are There?
As of May 2024, there are 339 Peet’s Coffee locations in the United States, the overwhelming majority of them located in California.
Peet’s outlets can be found in various non-traditional retail environments, such as universities and airports, further expanding its reach and increasing visibility and market share.
In 2017, Peet’s expanded to China, where it now has more than 100 stores.
The reach of Peet’s Coffee also goes well beyond its store locations. The company’s products can be found in more than 14,000 grocery stores across the nation.
How Does The Peet’s Coffee Licensed Partnership Program Work?
Peet’s Coffee offers licensing agreements for privately owned stores, providing an entry point into this nearly 60-year-old company.
Licensed partners can utilize Peet’s brand and sell products without strict adherence to a specific business plan. As part of the agreement with Peet’s Coffee, licensed partners pay royalty fees to the company based on gross sales.
Licensing allows independent coffee shops to sell Peet’s Coffee and use its name, though investment costs and royalty fees vary due to flexible offers.
Without a franchise agreement, the options for starting an independent coffee shop with Peet’s can differ in costs, making it challenging to determine the exact financial investment versus benefit for potential partners.
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What Makes Peet’s Coffee Unique Among Coffee Brands?
Peet’s Coffee is distinguished by its signature dark Arabica coffee, a staple since its inception as a company in 1966.
Peet’s is noteworthy for some of its offbeat marketing strategies. For National Coffee Day in 2023, Peet’s accepted reward points from rival brands like Starbucks and Dunkin’ through something they called their “Disloyalty Program.”
Peet’s also donated $25,000 to UC Davis to launch the Coffee Center, the first academic hub dedicated to the multidisciplinary study of post-harvest coffee.
Is Peet’s Coffee A Profitable Business For Investing?
Because Peet’s Coffee does not offer traditional franchise agreements, this article will consider its overall sales health and corporate profitability.
In 2020, Peet’s systemwide annual sales were $893.52 million, increasing to $962.82 million in 2021, an improvement of 12.6% year over year.
This positive growth indicates a strong potential for investment. Although smaller than Starbucks, Peet’s consistently shows annual growth, boasts good liquid assets, and continues opening new locations. This stability and momentum make Peet’s an attractive opportunity for potential licensees.