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2015 Second 100: Why Peet's is the No. 10 fastest-growing chain

2015 Second 100: Why Peet's is the No. 10 fastest-growing chain

This is part of Nation’s Restaurant News’ annual Second 100 report, a proprietary census ranking restaurant brands Nos. 101-200 by U.S. systemwide sales and other data. This special report focuses on a smaller, more growth-oriented universe than the Top 100 report.

Peet’s Coffee & Tea saw a 20-percent increase in domestic systemwide sales driven mostly by improved unit economics as it just opened a net 12 units, ending the year with 238 locations, an increase of 5.3 percent. Estimated sales per unit were up by nearly 10 percent to $975,000.

The relatively slow growth in unit openings came a year after the Emeryville, Calif.-based chain absorbed 88 Caribou Coffee locations in 2013 after Caribou was bought by Peet’s parent, German holding company Joh. A. Benckiser GmbH.

Peet’s ramped up its food offerings last year and also emphasized its focus on using local purveyors. In the spring Peet’s introduced a Fresh Food line in its core San Francisco Bay area market, where about a third of its restaurants are located. Those menu items were developed by local chef Arnold Eric Wong of Bacar and E&O Trading Company. Items included an herb roasted turkey sandwich, a black lentil salad and a cheese & fruit box.

It then followed a similar tack in Los Angeles with the introduction of cookies, breads, muffins, scones and specialty items from Los Angeles baker Hans Röckenwagner.

Keys to growth

Playing the local card: Peet’s works with well-known local chefs to provide distinctive menu items to its customers.

Vertical and horizontal integration: Parent company JAB not only owns a majority stake in Peet’s and Caribou, allowing it to leverage synergies there, but it also owns a majority stake in coffee and tea company D. E. Master Blenders 1753.

Menu innovation: Peet’s has ramped up its food program while continuing to offer innovative coffee and tea drinks, such as a line of chai items introduced as limited time offers for the fall. The line included a Dirty Chai, made with espresso, and a Pumpkin Chai Latte.

This article has been revised to reflect the following correction:

Correction: July 23, 2015 An earlier of this version of this article misstated parent company Joh. A. Benckiser GmbH's stake in D.E. Master Blenders 1753.

Contact Bret Thorn: [email protected]
Follow him on Twitter: @foodwriterdiary

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