Caribou Coffee’s new owners: killing the brand?

by JulieCraves on April 10, 2013

This post includes important updates, flagged in the text and at the end of the post.

Caribou Coffee,Image1 which sources all its beans from Rainforest Alliance certified farms, was acquired by the Joh. A. Benckiser Group (JAB), a private German holding company, in December 2012. Earlier in 2012, JAB acquired Peet’s Coffee & Tea.

When I wrote about the acquisition earlier this year, I stated,

I can only hope that under JAB, Caribou can continue with its transparency, excellent sustainability record, and its all-Rainforest Alliance coffee sourcing.

Unfortunately, it looks like JAB  is headed toward sourcing less certified coffee by favoring the Peet’s brand over Caribou and alienating many faithful Caribou customers and employees in the process.

Caribou abruptly announced the closing or rebranding of over a quarter of its 600+ stores. Eighty will be permanently closed in less than a week, including all or most in Ohio, Michigan, Pennsylvania, Maryland, Virginia, Georgia, Illinois, eastern Wisconsin and Washington. U.S. states where Caribou will continue to operate (for now) under its own brand will include Minnesota, North and South Dakota, Iowa, Kansas, western Wisconsin, North Carolina, and Colorado.

Another 88 stores will be converted to Peet’s Coffee & Tea stores. Peet’s is not a major purchaser of Rainforest Alliance coffee, or much of any certified coffee, for that matter. Of the 34 varieties currently listed on its website, only one is certified organic, while one is Fair Trade. Peet’s is also known for their very dark roasting (29 of the 34 are designated as “deep roasts”) and rather generically-labeled blends and “single origins.” Just what we need — more over-roasted mystery beans.

These changes have brought the ire of customers, many of whom are taking to social and other online media with responses ranging from dismay to vowing to never set foot in Peet’s to setting up Facebook pages denouncing the abrupt termination of employees. On the company’s own Facebook page, fans are expressing their dislike of the situation, complaining that the company is removing posts and comments, all while corporate Caribou has remained mum on the topic. This ham-handedness demonstrates a lack of sensitivity to Caribou customers, if nothing else. (Update: Forbes published an excellent piece on how poorly the company handled the public in the media, especially Facebook.)

JAB also owns 15% of D.E. [Douwe Egberts] Master Blenders 1753. Douwe Egberts is the Dutch company created when Sara Lee spun off all of its coffee and tea business.  As of late March 2013, both JAB and Anheuser-Busch are looking to acquire the rest of the Douwe Egberts.  As of April 12, 2013, Douwe Egberts has agreed to be acquired by JAB.  Allow me to be pessimistic and theorize that if this acquisition goes through, coffee sourcing will be streamlined via the supply chain of Douwe Egberts, one of the largest coffee buyers in the world.

The Douwe Egberts certifier of choice is UTZ Certified, not a bad certification, but very lean on environmental criteria and thus one which I do not consider an eco-certification. In 2012, Douwe Egberts sourced 65,000 tons of UTZ Certified coffee. Their goal is to have 25% of their coffee purchases “certified as sustainable” by 2015. Douwe Egberts gets a “D” grade on sustainability from RankABrand.

Regardless of what happens on the Douwe Egberts front, the recent actions by JAB seem to indicate a move towards away from sustainably-sourced and 100%-certified coffees…just what I was afraid of.

More updates: The Forbes piece mentioned above also talks about further potential changes, indicating what’s happened so far “doesn’t bode well for Caribou’s future.”

We also spoke confidentially to an employee of a local store slated to be converted to a Peet’s. He told us that in a team meeting when staff members brought up questions regarding differences in sustainable sourcing and certifications between Peet’s and Caribou, the management declined to discuss the topic.

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Revised on October 21, 2016

Posted in Caribou Coffee,Rainforest Alliance

Mike April 11, 2013 at 2:40 pm

Thanks for sharing this. Unfortunate to see though…

John April 11, 2013 at 3:21 pm

Very silly article. Certification is only one part of the sustainability puzzle. Peets is well known in the coffee trade for paying great prices to and building long-term relationships with environmentally and socially positive producers. And your theory about sourcing through DE is flat wrong. While I imagine there will be some streamlining of sourcing, it would make no sense for the companies to do this. And referencing a poorly written facebook page with a whopping 184 likes as being representative of broad consumer sentiment is just plain lazy.

JACraves April 11, 2013 at 5:46 pm

“Certification is only one part of the sustainability puzzle.” — I agree, and have written about the shortcomings and difficulties with certifications many times. However, for the average consumer, it is (sometimes the only) benchmark they have for choosing coffees that meet particular criteria. I also concur Peet’s has a good direct trade and social responsibility record — at least, prior to their acquisition. We don’t know how that might change.

“And your theory about sourcing through DE is flat wrong.” Since this is a theory and my opinion, it can’t be “wrong,” but nonetheless I certainly hope you are correct. If you have any evidence for this, please link to it or pass it along.

I noted the Facebook page as merely one example of consumer annoyance — nearly every news piece and social media site I went through for background on this story had many comments, nearly all expressing disappointment or dismay.

John April 11, 2013 at 6:41 pm

Thanks for the response. I guess there were several bits of your original post which really grated on me:
1. The implication that Peets is less committed to doing the right thing than Caribou is, solely based on the fact that they have not chosen to go 100% RFA as Caribou has. Phrases like “Just what we need — more over-roasted mystery beans.” denigrates their buying program unnecessarily and unfairly. Just because you personally don’t know who they source from and don’t like how they roast doesn’t mean that the buying practices are negative or harmful.
2. The conflation of what are likely straight business decisions (closing stores) with an intentional effort to move away from sustainable sourcing. The bulk of Caribou stores are based in or nearby Minnestora. While I of course have very little clue as to the YoY sales growth/decline in the outpost stores, it would seem that they do not have critical mass that is often needed with chain retail food/beverage brands outside of the upper midwest.
3. Fair point — you aren’t *wrong* with your hypothesis on DE. Poor word choice on my part. It’s just that this is quite a bit conspiracy-theorist, and regardless of *who* is buying the coffee, the fact is that both Peets and Caribou have fanatically loyal customer bases who are used to what they are used to. If DE started trying to pump lower quality coffee into these supply chains, it would be noticed.
4. Again, on the dissatisfaction bit, the flow of your writing suggests that customers are unhappy with Peets/Caribou moving towards sourcing less sustainable coffee. In fact, they seem overwhelmingly (and rightfully) upset about the jobs losses and impact on community.

Overall, it just seems like the post makes a lot of pessimistic guesses and statements of pseudo-fact based on very little informed information. Ending the post with “the recent actions by JAB seem to indicate a move towards away from sustainably-sourced and 100%-certified coffees…just what I was afraid of” is a prime example. The actions do nothing of the sort. Closing underperforming stores after a merger in order to position a combined company for future growth says nothing about their sustainability strategy at all.

I think both companies do great things in the sustainability world, and we have seen nothing so far to indicate that this will not continue.

Thanks for the post though — it definitely provoked thoughts in me!

Darrin O'Brien April 11, 2013 at 7:07 pm

The general point of this website is to help people understand sustainability with coffee.
Peet’s may have programs that support sustainability, and if so, doesn’t do a good job of communicating it.
Caribou is a company that made it easy for a consumer to choose coffee that is sourced sustainably (by RA standards) and from a wide-ranging selection of single origins, blends, and roast levels.

JACraves April 12, 2013 at 6:39 am

JAB (and Nestlé and JM Smuckers and … ) are all in business to make money and can use whatever strategies they like to pursue their profits. The point of this web site is quite specific — to discuss environmental and ecological sustainability in the coffee industry and highlight companies that have strong records in this regard which provide the background and information so like-minded consumers can make a choice based on those preferences. Indeed as you say, just because I don’t know where a company sources from doesn’t mean their buying practices are negative or harmful. But I’m not going to buy or recommend coffee if I don’t know or can’t find out! It’s counter to the mission here.

And a point of technicality: my science training and background means I am careful to state facts as facts, and conclusions, opinions, etc. prefaced as such. Peet’s offers dark-roasted beans with little information on where they come from, as do many other places. My statement about over-roasted mystery beans doesn’t say, much less denigrate, anything about Peet’s sourcing. And I did not state as fact (and did preface as pessimistic!) that JAB’s actions are moving away from sustainability. I said that they seem to indicate such. I think that’s a fair characterization of the elimination of 80 stores that once sold only 100% Rainforest Alliance certified coffee and switching 88 other stores to what are currently mostly “mystery sourced” beans.

We will have to see how this all plays out. I welcome you to comment here on further developments!

Emmy April 15, 2013 at 11:07 am

I rarely comment here but I thank you for this vital information. Sustainable – what on earth does that mean? I’m truly annoyed by this rampant greenwashing, if consumers even realize that coffee can harm the environment.

I just bought some Equal Exchange and Birds and Beans to compare. Sadly for some reason the shade grown stuff is ALWAYS so very weak and I have no clue why. It tastes good, and I’m experimenting with steeping it longer in the French Press. But I’m still baffled.

Still, I’m committed to sticking with the certified brands. Fair Trade means zilch for sustainability, so does organic if they’re just clearing away rainforest. I want to know exactly what kind of farm it’s on, to expect Rustic shade grown and a commitment to agroforestry. Thanks again for all your good info.

JulieCraves April 17, 2013 at 8:23 am

Emmy — I’ll just comment that growing coffee in the shade, sun, or somewhere in between really cannot impact “weakness.” That — as you have hit upon — has to do with brewing methods, in particular for your case grind level, temperature, and brew time. Switching coffees often means finding the best way to grind and brew that particular coffee to extract the proper strength (dissolved solids) and flavor. Tom at Sweet Maria’s has a good primer on the topic, and you’ll be able to find tons more on the web. I know you’ll be able to find a sustainably-grown coffee that you like! (And, the definition I use here for “sustainable” is right under the blog header.)

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