When the second shoe dropped and Peet’s Coffee and Tea announced that less than a month after buying Stumptown Coffee Roasters outright it had bought a majority stake of Intelligentsia Coffee, the specialty coffee world let out a collective expletive, with the sentiments split between an aggrieved “WTF” and a pleased “Hell yeah.”
The most apocalyptic saw the end of third-wave coffee, conflating the dubious term with a pair of companies, deciding to ignore the huge number of roasteries inspired by Stumptown and Intelligentsia. The business-minded saw the purchases as the inevitable next step in the maturation of a proven industry. If other roasteries are able to raise tens of millions of dollars in Goldman Sachs-directed investment rounds, then why wouldn’t a big coffee company decide to buy one of these roasteries? That viewpoint, though maybe more clear-eyed, still doesn’t grapple with the problem that we still haven’t seen one of the third-wave’s darlings scale up and maintain the quality and appeal on which they made their bones.
No matter which side of the doom–celebration divide you’re on, these particular sales shouldn’t have been surprising. (That they went to the same buyer certainly is.) It’s been known since at least May that Stumptown Coffee Roaster’s majority stakeholder, TSG Consumer Partners, wanted to sell the company, a move that had been predicted from the moment TSG bought a ninety-percent share of the roastery from founder Duane Sorenson in 2011. Intelligentsia had announced at the start of October that it was looking for a buyer and expected around $100 million from the deal. It wasn’t a shocker when it was announced Peet’s had bought out TSG and Sorenson’s remaining stake, but it still counted as the biggest café news of the month. Well, until the real surprise of Peet’s doubling down and buying Intelligentsia.
Since all three companies are private, no details about the purchases were issued and outside of their respective press releases the companies kept their statements limited to PR pabulum. Peet’s two press releases, their only business notices of the year, were nearly copy-and-past jobs. “Stumptown, one of the leading players in the fast growing ready-to-drink cold brew coffee business, will continue to operate independently while having full access to Peet’s resources and scale,” said the first, with the second saying, “Intelligentsia will continue to operate independently and have full access to Peet’s resources and scale.”
Peet’s said that Stumptown’s vibrant cold-brew business was a major draw for the purchase. The company also said that Joth Ricci, Stumptown’s president, will remain, as will the company’s name and branding, which it also said about Intelligentsia’s Doug Zell, Emily Mange, and Geoff Watts. Though expect to see Stumptown and Intelligentsia in more retail locations. All signs point to Peet’s using its distribution networks to pump up their acquisitions’ sales.
In a year that’s seen massive fundraising efforts by Blue Bottle, Philz, and La Colombe, the moves by Peet’s are another effort that will show us just how big specialty can get.
—Cory Eldridge is Fresh Cup’s editor.