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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Peet's Coffee, in short, was revolutionary. It prospered in a time before anyone knew what it meant for a bean to be shade-grown or fair-trade; before laypeople could point out the difference between an African and a South American coffee; before, even, anyone knew there was anything better out there than instant. And Peet, himself, became something of a folk hero among his customers and contemporaries. "Al Peet was a legend," recalled Erna Knutsen, who knew Peet socially in the early days and now runs her own small coffee company, Knutsen Coffees. "His standards were terrific. He thought he was the best judge of good coffee. His reputation was for fine coffee and for being very discriminating."

The Alfred Peet mythology still runs thick at his namesake company, even though he retired more than thirty years ago. After he died in 2007, the flagship store at Walnut and Vine expanded to include a small museum of Peet's life: Glass-walled cabinets display newspaper clippings and old-fashioned coffee and tea paraphernalia; a flatscreen TV plays a video explaining Peet's considerable legacy; the walls are lined with black-and-white photographs of the scene outside the store in its earliest days, of a bespectacled and stern-looking Peet surveying a collection of coffees, of eager customers lining up for fresh-roasted beans.

The store itself is now a bona fide tourist destination, as the Peet's origin story has come to be something of a fable in both the coffee business and Berkeley lore — a symbol of the enduring power of quality over quantity, of the triumph of the little guy, and of the East Bay's continuing influence in the realm of specialty coffee.

But now, both the company and the coffee culture it spawned are nearly unrecognizable from what they were when Peet's opened that first tiny shop. And for Small, there's no question that the company has changed markedly in recent years. "The company drifted away from its original passion and became much more corporate," he said. "It's still good coffee — it's fine coffee — but there's a certain loss of passion."

To anyone paying attention, this was probably inevitable. The original Peet's model — which placed a premium on small batches, extraordinary attention to detail, and extreme freshness — is very difficult to replicate on a large scale. It's hard to keep your coffee fresh when it's being sold in supermarkets, and it's hard to maintain a homegrown feel when you're raking in hundreds of millions of dollars a year. "I don't think you can grow a chain that large and maintain the integrity of the passion of the founders," Small said.

None of this is lost on the customer: "Customers crack jokes all the time that Alfred Peet is rolling over in his grave," said one employee. "Sometimes it feels like every day."

Which isn't to say everyone's wholly disappointed by the turn Peet's has taken. Before being interviewed for this story, Small had just bought a pound of Peet's beans, and Kenneth Davids, editor of the Berkeley-based website, noted that the company's coffees still tend to rank pretty high in his publication's tests. In fact, Davids said he's been largely impressed by the way Peet's handled its expansion. "They came to a point where they could either stay small or they could expand. And if they expand, how do they maintain their Peet's-ness? Given that difficulty, I think they've been pretty cautious and thoughtful about how they've changed." Or, at the very least, they haven't totally given up the ghost: "They could have destroyed the business so easily — so easily! To me, it's a surprise that they didn't."

But as an employee, Iulia Bodeanu got to see from the inside out how — as a publicly traded company with investors to answer to and a bottom line to attend to – Peet's turned to an increasingly corporate model. "Coffee is a labor of love for the most part, and Peet's started as a very personal company," she said. "It's just not the same now."

In her mind, one of the clearest distillations came in 2009, when the company introduced a controversial policy: Employees were now required to ask every patron if they'd like a pastry with their drink. "When I started, in the manual it said, basically, 'Use your best judgment,'" she recalled. "That used to be the philosophy — try to read the customer and get a feel for whether they're in a hurry, whether they look like the kind of person that would want something to eat, whatever. But then somewhere along the way, it became 'Shove this pastry down their throat whether they like it or not."

It's a sales technique not uncommon in food service, but many felt that it flew in the face of the previously flexible ethos at Peet's. It signaled, in a sense, a shift from thinking of patrons as customers to regarding them as consumers. It was, in fact, part of the reason why one former employee, Leon Wheeler, left the company: "I wanted to be a barista, not a salesman."

The pastry policy is enforced largely via Peet's team of secret shoppers, who systematically come into stores to measure the level of customer service. Employees are given a script and coached on how to talk to customers — for example, to ask how his or her day is going and to answer detailed questions about whichever drink the store is promoting at the time. If an employee fails to follow the script, the shopper notes that in his or her report, which is then filed away and used in future employee reviews, and which can be posted in the back of the store for other employees to see.

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