Peet's Coffee Hires Cutwater as Agency of Record and Plans a Broader Marketing Push

History of Limited Marketing Yields to Growing Ambitions

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Credit: Peet's
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Peet's Coffee, a coffee chain known for dark roasts and fresh beans, is ready to launch a brand campaign after several years of rapid expansion. The company has hired San Francisco agency Cutwater as its agency of record, Peet's and Cutwater confirmed to Ad Age.

Cutwater has started working on a campaign set to roll out near the end of 2015. Founder and Chief Creative Officer Chuck McBride and Principal and President Christian Hughes will work on the Peet's work directly along with other staffers. The agency has a staff of about 30 people.

Peet's, which refers to both its staff and its biggest fans as "peetniks," was founded by Alfred Peet in Berkeley, Calif. in 1966. The company, now based in nearby Emeryville, Calif., runs coffee shops and sells its coffee in grocery stores, through other retailers and online.

In 2012, both Peet's and Caribou Coffee were acquired by private investment group JAB Holding Co. Since then, Peet's has expanded its coffee shop presence in cities such as Chicago and Washington, D.C., in part by taking over shops that used to be operated by Caribou.

"We really haven't had a long history of working with agencies, especially for any particular length of time," said Chief Marketing Officer Tyler Ricks, who joined Peet's in 2014. "Historically, Peet's has not spent a lot on marketing, and specifically, has not spent a lot on media or advertising."

Until now, Peet's limited advertising and marketing budget has focused on efforts such as in-store signs and radio. It also advertised on bus shelters and with geo-targeted digital ads in markets such as Chicago and Washington, D.C. as it expanded, though Mr. Ricks said the spending was minimal. "If we broke $1 million, that was generous," he said, referring to the expansion marketing.

Now, with growth both at its own coffee shops and in the grocery aisles, along with new initiatives such as Cold Brew iced coffee in place, Peet's is ready to tell its story more widely. "We're ramping up our spend both in dollars and as a percent of sales to really invest behind building the brand," Mr. Ricks said. "We will spend this year on media probably 4x what we spent last year."

Peet's is much smaller than many of its coffee rivals. The company spent about $737,000 on measured media in 2014, with more than half of that spending on radio, according to Kantar Media. Starbucks spent $103 million last year in the U.S. alone.

About half of Peet's spending this year has gone toward Javiva, a frozen blended drink launched earlier this year, and an ongoing push for Peet's new Cold Brew iced coffee.

Mr. Ricks said Peet's has used three agencies in the last year for three different projects. EVB worked on the Meet Peet's effort as the chain expanded into new markets; Swirl did work on Javiva; and Something Massive worked on the Cold Brew launch.

The Cold Brew campaign, one Mr. Ricks called a "pretty scrappy" effort, included digital videos and a TV comercial that only aired in the San Francisco Bay Area. Overall, Peet's iced coffee sales have perked up nearly 70% since it launched its Cold Brew version, Mr. Ricks said.

He said Peet's met with four or five different agencies in the Bay Area but never put out a formal request for proposals or pitch before selecting Cutwater.

"It was really a latent brand that was just waiting for our story to be told to take it a little bit more mainstream," Mr. Ricks said. He said the company has not finalized its media plans just yet.

Mr. Hughes of Cutwater said one of the things he finds attractive about his new client, along with a storied brand, is the seasoned management team. He mentioned CEO Dave Burwick and Mr. Ricks, who each have years of experience at other consumer companies including years together at PepsiCo.

Cutwater began as part of TBWA/Chiat/Day in 2007. Mr. McBride and Mr. Hughes then took it private in 2011. Mr. Hughes most recently served as global business director at JWT.

Before he met with Peet's, Mr. Hughes was already familiar with the brand. He said he walks about a block and a half from home in San Francisco --- skipping a Starbucks right next door to where he lives -- for his caffe latte fix. "My palate naturally went to Peet's … I was already a Peetnik before we met them," he said.