Blockbuster: Peet's Coffee & Tea Buys Intelligentsia Coffee

Peet's purchased Portland-based Stumptown coffee just last month.

This morning, Peet's Coffee & Tea, the Emeryville, Cali.-based coffee roaster and retailer, announced it had acquired a majority stake in Intelligentsia Coffee, the Chicago-based roaster. This is Peet's second major purchase in two months. In early October, the company announced its purchase of Portland, Ore.-based Stumptown Coffee.

Reached by phone, Director of Marketing Hayden Perry says the reasons for the purchase are simple: "We have built a portfolio of brands in the super premium coffee segment in order to appeal to a broad variety of consumers in that segment." It's no secret that craft coffee is a major trend across the country, with boutique roasters and third wave shops popping up in every city, from Los Angeles to Charleston; Houston to Miami.

Fans of Intelligentsia are likely to be surprised by the news. For decades, the Chicago-based roaster paved the way for small, boot-strapping coffee companies. Intelligentsia was one of the first coffee brands to think about everything from the coffee farmer to the roasting process to the temperature of the beverage when it hits the cup. The roaster has grown rapidly in recent years and now has a total of 10 coffee bars in Chicago, Los Angeles, and New York, and two roasting facilities nationwide.

So will Intelligentsia's new boss change that? Perry says no: "We don't anticipate it changing, we're going to continue to operate as it is, as independent businesses." This goes for the whole operation: Though Peet's and Intelligentsia buy coffee beans from different coffee collectives and farmers, Peet's promises this won't change. The channels in which the roasters acquire their coffee will stay the same.

Intelligentsia has expanded quite a bit on its own already, so will this infusion of resources help it grow even further? Peet's and Intelligentsia aren't commenting on that, but do say that Intelligentsia's team will now have access to Peet's resources and scale. Per a release, Intelligentsia co-founders Doug Zell and Emily Mange along with co-owner Geoff Watts "will retain a significant stake in the business and stay actively involved in the company's operations."

Dave Burwick, president and CEO of Peet's Coffee & Tea released this statement: "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. 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."

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