SAN FRANCISCO (TheStreet) -- Bay Area residents are very particular about their daily cup of Joe.
So it was major news here this week when Peet's Coffee & Tea, founded in 1966 and headquartered in Emeryville, announced it was buying Portland, Ore.-based Stumptown Coffee Roasters. Founded in 1999, Stumptown is one of the early pioneers of the cold brew coffee movement. Financial terms of the deal were not disclosed.
"It's a very hot topic in the coffee world," said Brandon Loper, a 32-year old commercial and documentary filmmaker whose 2014 movie, A Film About Coffee, follows the production of coffee from farms in Honduras and harvests in Rwanda to its global consumption.
"Initially I was surprised," said Loper, who lives with his family in San Francisco and enjoys drinking Stumptown at home and also at Jane on Fillmore in his Pacific Heights neighborhood. "But the more I thought about it the more it makes sense. Peet's is very accessible and they have a friendly persona. Some of the other big chains don't have that hometown vibe. Their marketing is moving more toward specialty products. And that's where Stumptown can help them."
Fillmore Street in lovely Pacific Heights represents the heart of one of San Francisco's most exclusive neighborhoods. Lined with trendy boutiques, leisurely day-time shoppers and local couples out for an evening stroll, it is charming and, like the rest of the Bay Area, coffee-obsessed.
Situated along a quarter-mile stretch that is packed with high-end retailers like Eileen Fisher, Marc Jacobs and Rag & Bone, are four bustling coffee shops and two busy bakeries that also serve coffee. Two Starbucks (SBUX) - Get Report cafes, one Peet's Coffee & Tea and the locally owned Jane on Fillmore, which serves a specialty brew from Stumptown, all compete for customers within three blocks of each another. Soon, another cafe, the formidable Blue Bottle Coffee, will open in the neighborhood, too.
In addition to all that brew, the neighborhood grocer, Mollie Stone's Market, offers coffees from more than a half-dozen, locally-based companies, including Jeremiah's Pick Coffee, Ritual Coffee, Philz Coffee, Coast Roast Coffee, San Francisco Coffee and Catahoula Coffee.
According to a press release issued by both companies, "Peet's will continue to pursue its own growth strategy, operating 'as is' across its retail cafes, wholesale and grocery channels." Stumptown's coffee will not be sold at Peet's stores. The companies also noted Stumptown will continue to operate independently while having full access to Peet's resources and scale.
"I think it would be a mistake for them to offer Stumptown at Peet's," said Loper. "It goes back to the customer loyalty thing."
Privately-held Peet's, owned by JABHoldings, operates dozens of stores in California as well as locations in Colorado, Illinois, Maryland, Massachusetts, Oregon, Virginia, Washington and Washington, D.C. Stumptown has 10 stores in Portland, Seattle, New York and Los Angeles.
"The deal will help Stumptown grow," Matt Lounsbury, Stumptown's vice president of its wholesale and retail businesses," told the New York Times.
One company apparently unimpressed by the deal was Starbucks. Starbucks spokesman Corey DuBrowa tweeted the news with the comment: "File under 'huh', '' the Seattle Times reported. The tweet has since been deleted.
Many San Francisco residents aren't big fans of Starbucks, especially in the aftermath of that company's 2012 acquisition of 22 locally-owned La Boulange cafes. Starbucks shuttered the popular cafes just a few weeks ago and will sell La Boulange's pastries from its own stores.
But Pascal Rigo, who founded and operated La Boulange before Starbucks bought his company, has plans to reopen five of the cafes under a slightly different name, Boulangerie. The first Boulangerie opened its doors earlier this week just a half block from Fillmore Street.
"Are you still selling Starbucks coffee here?" a customer wanted to know Thursday morning.
"Oh no, no, no," said the friendly counterman, happy to be back in business.
"We've gone back to what we were selling before Starbucks bought us -- Equator coffee."
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.