When you pioneer an industry, how can you continue to stay disruptive for generations to come? Just ask Peet’s Coffee, the over 50-year-old coffee company fighting to stay relevant and appeal to craft coffee-chugging Millennials.
Over fifty years ago, Alfred Peet opened the very first Peet’s Coffee shop. The year was 1966, when coffee from a can was the norm. From his shop in Berkeley, Calif., the Dutch immigrant began hand-roasting coffee beans in small batches, creating bold and complex blends that were unlike anything in the American market.
That was the beginning of the specialty coffee movement.
Today, the question at Peet’s Coffee is how to keep ahead of that movement while staying true to its brand. As demand for specialty coffee has exploded, so has the competition.
Here are 5 key lessons from Peet’s entrepreneurs can use as they look to grow their business.
1. Seek out the best players in your field and learn from the ground up
When starting a new venture, entrepreneurs must know every aspect of their business in and out. And what better way to gain insight than to seek out the most respected industry leader to teach you the ropes? This includes not only roasting, operations, and management but also marketing, which is often minimalized and given to office staff, recent college grads with communications degrees, or interns.
2. Don’t be afraid to make the right decision quickly – and move on
Some decisions require a great deal of contemplation, but when you’re sure you know the answer, don’t be afraid to act quickly. Taking calculated risks is part of running a business and that includes strategic marketing spends that can result in significant ROI.
3. Grow big, grow fast, but don’t grow out of your brand values
Peet’s still has no plans of chasing Starbucks, which now has 22,000 stores and generates annual revenue of $17 billion. To do that the company must uphold the quality of its coffee, but do things differently to grow and to reach more people. In 2015, Peet’s went on an aggressive buying spree, acquiring third-wave coffee brands Stumptown Coffee Roasters and Intelligentsia Coffee. (Interestingly enough, the founders of both companies got their start at Peet’s.) The acquisitions did not go unnoticed, and devoted coffee lovers sounded off on Twitter. To calm the uproar, Peet’s emphasized it will keep the leadership in place and allow the brands to operate independently. The chain continues to abide by a vision of staying small and true to its craft, scaling the company’s smallness and staying focused on communicating its brand’s core values through consistent marketing.
4. Give in to the pressure to innovate
The coffee industry is largely driven by consumer demand for novelty. Right now, cold brew coffee is the hot trend, favored by 24% of consumers (most of them millennials). Over the last few years, Peet’s launched cold brew in all of its locations and remodeled its stores to make them more appealing to a younger demographic. The company later bought Stumptown, what it views as the pioneer of cold brew coffee, to further capture the millennial market.
Of course, not everyone is fortunate enough to be able to stay on top of the trends by buying up other companies; the larger message is to have a finger on the pulse of the market at all times and embrace the idea of changing your offerings.
5. Don’t forget what made you great in the first place
In order for a pioneering company to maintain its dominance in the market, it must experiment with new products, but it must never lose touch with its roots. Peet’s sees its age as an advantage, not an impediment. The acquisitions, the remodeling of Peet’s coffee shops, the cold brew. It’s all part of the plan to adapt. But perhaps the most disruptive thing Peet’s does today is something that dates back to Alfred Peet’s original store in 1966 – the reliance on human precision to brew coffee.
From an article by Polina Marinova which originally appeared in Fortune Magazine
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