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Peet's Buys Stake in Intelligentsia, Metropolis Roasts It as a Sellout

By  Tanveer Ali and Ariel Cheung | October 30, 2015 11:54am | Updated on November 2, 2015 10:49am

 The flagship Intelligentsia on Broadway.
The flagship Intelligentsia on Broadway.
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CHICAGO — Longtime independent Chicago coffee roaster Intelligentsia Coffee sold a majority stake to Peet's Coffee, a larger company that's been snatching up independent roasters. 

Doug Zell, who started the company at a Lakeview storefront in 1995 with Emily Mange, said in a blog post Friday that it sold to the "granddaddy" of specialty coffee.

"Speaking for myself, this is an interesting and rewarding place to land. We've pushed really hard for over twenty years," he wrote.

Peet's Coffee & Tea, a Berkeley, Calif.-based company, has 11 Chicago locations already. Intelligentsia has six in Chicago, in addition to locations in Los Angeles and New York City. Intelligenstia opened its seventh location last summer in Wicker Park at the base of an 99-unit apartment building.

Dave Burwick, Peet's president and CEO, said in a statement that his company bought a majority stake in Intelligentsia "due to more consumers (18-34 year olds) demanding variety and highly specialized coffee experiences."

To reach the generation also known as millennials, "it’s important that we offer differentiated craft coffee brands with unique propositions and appeal," Burwick said.

The news of the sale was not well-received by all; Metropolis Coffee Co. blasted the move in a Facebook post on Friday.

"Metropolis is 100% family owned ... not a German equity firm disguised as Peet's Coffee & Tea, a group of silicon valley equity investors, or a yogurt company," it wrote. "Feel free to give us a call about wholesale coffee."


An open letter to Intelligentsia Coffee and Stumptown Coffee Roasters customers. Metropolis is 100% family owned by Jeff...

Posted by Metropolis Coffee Company on Friday, October 30, 2015

Dan Miracle, Metropolis' chief operating officer, said his company is still processing the news of the sale of Intelligentsia, which has expanded beyond its Chicago roots in recent years.

"Metropolis would like to position itself as the Chicago roaster," Miracle said.

Earlier this month, Intelligentsia began seeking a buyer to help expand the 20-year-old business. The high-end coffee is a popular addition to some of Chicago's favorite neighborhood hot spots like Stan's Donuts and DryHop Brewers.

The flagship location on North Broadway has been a point of pride for East Lakeview, especially as Intelligentsia blossomed.

"There are a lot of successful businesses that came out of here. Intelligentsia started here, Reckless Records, Bar Pastoral. They all started here," Maureen Martino, executive director of the Lakeview East Chamber of Commerce, said in July.

However, with skyrocketing prices for real estate in trendy neighborhoods, "independents can't afford the market," she added.

Zell said that he and other leaders at Intelligentsia will continue to have a role at the company.

"If anything, this means we will have more muscle and resources to invest in the things that got us here," Zell wrote. "Peet's recognizes that we are special and wants to provide a canvas that will allow more of the world to see the picture we are painting. Perhaps a good analogy is we've been showing our artwork at a local gallery and now have an opportunity for a spot at the Louvre."

Almost exactly a year ago, JAB Holding Co. — the majority owner of Peet's Coffee & Tea and Caribou Coffee — purchased Einstein Noah Restaurant Group, which also includes Noah's New York Bagels and Manhattan Bagel brands, in addition to the Einstein brand.

In February, the company closed 39 “underperforming” Einstein Bros. locations, including 11 in Chicago. Slowly, the empty buildings are being replaced, most recently with Blackwood BBQ moving into one of the two Lakeview spots.

Earlier this fall, Peet's bought another independent coffee darling, Portland, Ore.-based Stumptown Coffee Roasters.

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