How Peet's Starbucked Itself 

The iconic East Bay company that pioneered gourmet coffee with a small business ethos has grown increasingly like its mega-chain offspring.

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Though Wheeler noted that the system provides a way for managers to get a sense of what's happening on the floor when they're not looking, others said the secret shopper program feels to them like an overly corporate, one-size-fits-all solution to customer service. "It's really, really rigid, and if you don't hit on specific points" — like, for example, a caramel latte's "toasted and buttery" notes — you're dinged, said a former employee.

Peet's officials declined to be interviewed for this story.

It's all part of what some are calling the "Starbucksification" of Peet's — a process that started relatively slow but is, at this point, impossible to ignore as Peet's retail outlets continue to roll out more merchandise, more seasonal promotions, and more offerings. In what's perhaps the clearest example, lattes — let alone flavored ones — were completely absent from the Peet's menu until the 1990s. (Alfred Peet is said to have bristled at the idea of even selling drip coffee, as he wanted to focus on whole beans instead.) Indeed, as late as 1999, Jerry Baldwin, the former Starbucks CEO who bought the company from Peet when he retired in the mid-Eighties, was quoted in the San Francisco Chronicle saying he considered the company to be "a specialty roaster more than a beverage bar." Now, Peet's sells a full slate of espresso drinks, as well as seasonal beverages like pumpkin spice lattes and flavored freddos, iced beverages nearly identical to the ubiquitous frappucino.

In other words, while Starbucks once copied Peet's, Peet's is now copying Starbucks. Or, as Bodeanu put it: "Now it feels like all they do is take the same promotions from Starbucks. It's like, what are other people doing? Let's copy it. There's no philosophy to it anymore."

To be fair, some of Peet's offerings are likely a response to changing consumer tastes: The Starbucks hegemony has, undoubtedly, meant that people come to expect caramel lattes, pastries, and iced drinks at their local coffee chain. There's the irony: In going public, expanding, and competing on a national scale, the company that was once a leader is now a follower.

As Peet's has been busy following Starbucks, another market niche has emerged, and it's squeezing Peet's from the other direction. Twenty, ten, or even five years ago, if you cared about coffee, Peet's may have been your only option. But now, an army of small businesses — Cole Coffee in Rockridge; Blue Bottle in Jack London Square and elsewhere in the Bay Area; Philz Coffee, a small chain that opened an outlet a few blocks away from the Peet's flagship in 2009 — are increasingly serving the customers that may have been Peet's devotees back in the day: serious coffee drinkers who appreciate small-scale production, high-quality beans, artisan roasting, and homespun service.

Indeed, these companies are responding to a market need that seems to be directly related to the heightened expectations that Peet's originally engendered. "Peet's has been hugely influential in forming people's tastes," said James Freeman, CEO of Blue Bottle. When Freeman was just starting, selling his coffee from a truck at farmers' markets, "It was like, that's how everyone measured taste," he said. "You were as good as you could measure up to Peet's."

Moreover, Freida Hoffman, of Berkeley's Local 123 cafe, noted that Peet was a pioneer for responsibly sourced coffee. "Something that Peet's really did was help raise awareness of organic and fair trade — that's something that customers have now come to expect."

Ultimately, Hoffman said, her business essentially wouldn't be possible had it not been for Alfred Peet. "I don't think without Peet's we would have jumped from Folger's and Maxwell House in a can to where we are today," she said. "I absolutely respect Peet's and what they've done for coffee."

She noted, however, that many of her customers are former Peet's regulars.

All this competition is perhaps most apparent when you talk to the people who tend to bear the brunt of it: lower-level employees at Peet's. "The pressure is absolutely constant," said one barista.

She didn't want her name revealed, nor did any of the other current employees interviewed for this article. Several also asked that their history with the company, store location, and other identifying details be concealed, and all expressed intense, if abstract, fear of retribution for their participation in this story. They also spoke of a corporate structure that's vast, top-down, and marked by pressure at every rung of the ladder.

Wheeler, a former employee who was willing to speak openly about Peet's, worked at various stores through the 2000s before serving as an assistant manager at the Lakeshore branch. He said he and other leaders felt increasing pressure to raise profits. "Each quarter, you'd meet with your district manager and go over the numbers and talk about how to get them up."

And that expectation — that profits will continually rise — gets relayed to lower-level employees: "My manager and my assistant manager are under constant pressure to make more and more profits, [pressure] which they pass on to us," said one employee at a highly trafficked store. "The rare moments when we have a break, maybe some time to stretch or get a glass of water, you'll look over at the manager and he'll be stressed because we don't have any customers."

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