Alfred Peet grew up in the coffee business while living in the Netherlands as a child. Moving to San Francisco when he was 35, he began roasting coffee in the 1960s. Peet started Peet's Coffee, Tea & Spices as a single store in 1966 in Berkeley, California. Peet's original outlet is still located on the corner of Walnut and Vine (2124 Vine Street) in the Gourmet Ghetto of North Berkeley, close to the University of California. That location now contains a museum, displaying memorabilia and historical coffee equipment.
Peet's predates Starbucks, and served as a model for that enterprise.The three founders of the Seattle-based chain all knew Peet personally; when they began their store in 1971, they bought their beans directly from Peet's, and continued to do so for the first year of business.
Peet sold his business in 1979 to Sal Bonavita, staying on as a consultant until 1984. In 1984, Jerry Baldwin, one of the founders of Starbucks, along with co-owner Jim Reynolds, the coffee buyer, and a group of investors, bought the four Bay Area Peet's locations from Bonavita. In 1987, Baldwin and Peet's owners sold the Starbucks chain to focus on Peet's, and Howard Schultz, Starbucks' new owner, entered into a four-year non-compete agreement in the Bay Area.
The company went public in January 2001 (symbol PEET). After a successful IPO, shares struggled through the first year but posted solid gains from then on.
In 2003, the first full-service Peet's store on a university campus was opened within the Clark Center building at Stanford University.Peet's coffee is also currently served at all Stanford Dining locations. In 2005, UC Berkeley opened its own Peet's franchise on campus in Dwinelle Hall and as a campus restaurant near its existing dining area. Similarly in 2009, locations opened at the UW–Madison, Villanova University, Memorial Unionand at UC San Diego