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Peets Coffee and Tea - Business Model and SWOT Analysis

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Peet’ s coffee has managed to attract and maintain a large group of loyal consumers who call themselves the “ Peetnicks” although the term as evolved to include consumers that adore quality coffee and tea. Peet coffee has a wide variety of signature blends such as French Roast, Espresso Forte, Fair Trade Blend, and Arabian Mocha-Java. Its stores located in most parts of the country offer 2-hour free wireless internet for its customers. Most of Peet’ s grocery stores are located in the State of Calfornia. Its specialty segment controls 46% of the market share in the Bay Area.

Recently, the company has managed to expand its product to other grocery locations in New York, Carolina, and Florida. Business segmentRetail storeThe retail segments accounted for 68% of total sales; the remaining 32% represented the specialty segment. As of 2010, the company operated 190 retail stores located in six different states through which Peet sells whole coffee bean, pastries, and beverages (Obermiller 160). The company retail stores are designed to enhance the sale of fresh coffee beans and to encourage customers to try out coffee varieties through its beverages.

Reports indicate that the net sales in the retail segment increased by 2% in 2010 compared to the previous year. The increase was due to an increase in sales level in the stores. SpecialtyGrocery: Sales revenue in the grocery stores comprised 23% of the net revenue in the year ending December 2010. Peet coffee sells most of its merchandise through various groceries, and club stores. To boost these sales, the company has developed a merchandising system that has enhanced its competitiveness in the specialty segment. Currently, the growth rate of the company in the grocery is estimated at 22%. Home delivery: In 2010, home deliveries contributed 5% of the net sales revenue.

The home delivery channel provides access to fresh-roasted coffee to the customers. The home delivery services are offered through the company’ s website.

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