It’s a venti takeover: Starbucks buys 40 Coffee People stores from Diedrich Coffee
By Bean Counter, on Friday, September 15th, 2006
Starbucks has bought 40 Coffee People stores for $13.5 million from West Coast competitor Diedrich Coffee, which is exiting the tough coffee retail market to focus on its wholsesale and franchising businesses.
The Oregonian reports the reaction of Coffee People’s original founder:
“Starbucks owning Coffee People? I never thought that would happen,” said Jim Roberts, who now operates Jim & Patty’s Coffee on Northeast Fremont Street.
He’s distanced himself from his former baby in recent years, but Roberts said he’s still serving the original Black Tiger recipe — now called Top Thrill Dragster — a step above what they’re selling as the strong brew at his old stores.
Diedrich’s sell-off ends an ambitious but failed expansion effort, as Los Angeles Times reports:
In 1999 the company hired former Taco Bell executive John Martin to run the business. Martin embarked on a buying spree, snapping up such chains as Coffee Plantation, Coffee People and Gloria Jean’s Coffees. Those acquisitions boosted Diedrich’s retail outlets to nearly 400, the majority of which were franchised.
But the company was unable to manage such a large network and has steadily lost money and shrunk. It has 153 Diedrich and Gloria Jean’s franchises now.