Peet's and Starbucks

I see in today's Chronicle that Alfred Peet, founder of Peet's Coffee, died. Peet's was and still is a Berkeley institution. When we moved to the peninsula from Berkeley, we were happy to find one of the only four Peet's stores nearby in Menlo Park. I always knew there was some story about Peet's vs. Starbucks, and the article spells it out:

Peet sold his business in 1979 but stayed on as a coffee buyer until 1983. In 1984, Starbucks co-owner Baldwin and Reynolds, the roastmaster, with a group of investors bought Peet's four Bay Area locations. In 1987, Baldwin and Peet's owners sold the Starbucks chain to focus on Peet's, and Baldwin and Howard Schultz, Starbucks' new owner, entered into a no-compete agreement in the Bay Area. In 2001, Peet's became a public company.

So Peet and his roastmaster sold the company to Starbucks when Starbucks was just a local Seattle phenomenon, then sold their interest in Starbucks so they could focus on Peet's. The non-compete kept Starbucks out of the bay area for a while, but the Starbucks juggernaut pretty much bulldozed them. I see Peet's made about $230M last year, while Starbucks made almost $9B.

Peet's is still better coffee.