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Peet's Coffee & Tea, Inc. Message Board

  • laurabojkui laurabojkui Nov 10, 2009 2:43 PM Flag

    The trend is your friend:


    Timing coffee machine maker PEET next leg up towards $60

    Spreading single-serve coffee systems

    Single-cup brewers satisfy consumers' desire for convenient, high-quality
    coffee. Popular with early adopters, "it doesn't feel like a fad," Tarantino
    says. Green Mountain shares, by the way, have shot up 166% this year.

    Supporters of the Diedrich acquisition argue that the popularity of Peet's
    brands—which now include Godiva—and its ability to distribute products could
    boost the popularity of single-cup brewing. "The combined company will
    accelerate the adoption of the K-Cup single-serve system," Diedrich Coffee
    Chairman Paul Heeschen told analysts on Nov. 3.

    Analysts warned that the deal requires $140 million in debt and could hurt 2010
    earnings. But executives said earnings-per-share could double by 2011. "This
    combination of Peet's and Diedrich is a significant win for everybody," Peet's
    chief executive Patrick O'Dea told analysts.

    One impact of the recession has been a move toward drinking more coffee at home
    or at workmdash;where it is generally cheaper—and less of it at restaurants and
    coffee shops. But even that trend seems to have softened in recent months,
    Rhinehart says. He believes the popularity of coffee shops such as Starbucks has
    survived the recession. "People are returning to the coffee house because it is
    a place where they're comfortable and a place they get benefits other than
    coffee," Rhinehart says.

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