Thank you for sharing!

Your article was successfully shared with the contacts you provided.

IRVINE, CA-Diedrich Coffee Inc. plans to sell its 40 company-owned stores to Starbucks for $13.5 million in a move to focus on its wholesale business. The company, which operates about 200 locations under the Diedrich Coffee and Gloria Jean’s brand names, with most of them operated by franchisees, says that the franchised stores will continue to operate under those names.

The sale to Starbucks will be subject to customary closing conditions, including approval by Diedrich shareholders. The Irvine-based company, in explaining the move, says that its inherent strength is “as a premier roaster of imported specialty coffee” that wants to take advantage of “positive trends in the wholesale market.” It is one of the largest specialty coffee suppliers in the US.

Steve Coffey, CEO of Diedrich Coffee, says that with the trends shifting towards specialty coffee in restaurants, offices and specialty stores, Diedrich has expanded its wholesale business substantially. During the past 12 months, the wholesale operation grew 46% from the previous year, with sales last quarter trending up at 50% above the same period last year. Third-party sales for the quarter ended June 28, 2006 represented 78% of all coffee sold by the company.

The Gloria Jean’s franchise system and the franchisee-owned Diedrich Coffee stores “are not directly affected by thesale transaction,” according to Diedrich. It says that the sale of its company-owned stores will leave Diedrich “without the distractionof running two company store systems.”

The company’s three brands are Gloria Jean’s Coffees, Diedrich Coffee and Coffee People, which it sells through more than 800 wholesale accounts including coffeehouses, office coffee service distributors, restaurants, specialty retailers as well as direct-to-consumer via the Internet. The company’s 200 domestic retail outlets, the majority of which are franchised, are located in 33 states.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper



Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt
Live Chat

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.