In 1966, Alfred Peet opened a shop selling coffee beans and loose tea—and unknowingly started the gourmet coffee movement in America. Peet’s family had been in the coffee business in Holland; so Peet decided he would roast the coffee beans in his Berkeley, California, shop just as they did in the old country. Customers would come into the shop, and Peet would offer them a cup of coffee while they waited for their beans to be roasted. The community atmosphere in the shop became contagious, with customers enjoying and talking about coffee. Peet’s Coffee & Tea now has more than 120 neighborhood stores selling a variety of coffee and tea products that are consumed on and off the premises.

1. Is Peet’s market monopolistic or an oligopoly?
2. What are some ways that Peet’s Coffee & Tea tries to differentiate its product offering?
3. What consumer needs is Peet’s satisfying?