InsideBayArea.com, a Web entity representing a number of local newspapers including the Oakland Tribune and the Marin Independent Journal, published an article today on the growth dilemma facing Peet’s Coffee & Tea: Inside Bay Area – Coffee roaster pushes beyond its ‘Peetnik’ roots. (There’s a bit more detail in this article than in the related one posted here in June.)

While chains like Starbucks long ago gave up any pretense of preserving the quality of their brand as they supported their breakneck store growth, Peet’s has expanded ever so carefully. In the process, they’ve been able to preserve higher levels of quality control — such as access to smaller lots of higher quality beans (while maintaining consistency), roasting in smaller batches, and hiring more skilled employees. But in recent years, Peet’s growth has accelerated: from 60 stores in May 2002 to over 120 today.

Will Peet’s growth plans allow it to preserve a higher quality standard? Or will it succumb to becoming just another Starbucks wannabe where quantity rules over quality. Peet’s needs to preserve its quality standards as a differentiator. However, those standards will inevitably decline with their expansion plans. The question is how much.

UPDATE: March 8, 2007
Peet’s expansion plans were the subject of a Contra Costa Times article today: ContraCostaTimes.com | 03/08/2007 | Peet’s future is percolating. Their challenge is how to grow without the bloat of Starbucks.