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Intelligentsia Founder After Peet's Deal: 'Still a Great Chicago Brand'

Doug Zell thinks the coffee chain's quality will improve after the sale to Peet's.

Intelligentsia's Lakeview flagship
Intelligentsia's Lakeview flagship
Marc Much

Intelligentsia Coffee isn't the first Chicago beverage brand to sell to a company based outside the city: Goose Island Brewing ended up in the hands of AB InBev four years ago. Coincidentally enough, when talking about the pending deal with Peet's Coffee & Tea, Intelligentsia brass made a comparison to craft beer drinkers, seeing how their customer base is willing to pay more for a supposedly premium product.

Officials from Peet's, based in Emeryville, Calif., and Intelligentsia insist that the latter will retain autonomy as an independent brand, and that those stylish coffee bars will remain operating as usual. Figures haven't been shared, but an earlier estimate had the company looking for $100 million. But now that Peet's has purchased a majority stake in Intelligentsia, is this still a Chicago company?

"I think it's still a great Chicago brand. I'm still talking to you here at Fulton and Wolcott, just north of the United Center," Intelligentsia founder Doug Zell said. "Frankly, I love that this business grew and made its mark in Chicago and really was formed here."

Intelligentsia's footprint has long surpassed Chicago's borders, with bars in Los Angeles and New York. The company's website proudly declared it had three homes. However, Zell maintains the company's philosophy stems from Midwestern pragmatism. That won't change with the Peet's deal.

"We're certainly from here, it's a great city, it's a great coffee culture that exists here, we do like the other places where we operate, but this is where we're from," he said.

Chicago customers won't need to brace for change, Zell assured. He thinks Intelligentsia's quality will improve thanks to Peet's resources: Money, connections and knowledge. The brand's known for being picky when choosing beans, and Zell said some of that philosophy found its way to the negotiation table in searching for a partner with integrity, who matched values. Direct-trade beans have been the backbone of Intelligentsia's business, and so those shared ethics were important to Zell, co-founder Emily Mange and co-owner Geoff Watts, all who will remain with the company.

Zell called Peet's "the granddaddy of specialty coffees," noting his past employment experience with Peet's. He made an art gallery analogy, saying the deal gives Intelligentsia more exposure through improved distribution, the equivalent of an artist having a spot at the Louvre.

Founded in 1995 in Lakeview, Intelligentsia now has six shops in Chicago, plus the headquarters and roasting plant on the near West Side where Zell spoke from Friday morning. Much of what's been discussed mirrors the banter earlier this month after Peet's purchased Portland, Ore.'s Stumpdown Coffee. The Stumpdown deal didn't affect his talks with Peet's, Zell said, adding that they'd been talking about selling for "a long time."

Peet's CEO David Burwick also echoed Zell: "I want to make sure it's really clear that Intelligentsia is not moving, they're not going anywhere. They're going to continue to be run by Doug and Emily and the rest of the team here and maintain clean independence from Peet's to do what they do really well. That's part of the deal, that's the whole premise of this."

Intelligentsia Coffee

53 E Randolph Street, Chicago, IL 60601 312 920 9332

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