Tully's Coffee

Last updated
Tully's Coffee
Product type Coffee
Owner Keurig Dr Pepper
CountryU.S.
Introduced1992;32 years ago (1992)

Tully's Coffee is an American specialty coffee manufacturing brand owned by Keurig Dr Pepper, which acquired Tully's brand and wholesale business in 2009. [1] [2] [3]

Contents

Tully's branded coffee continues to be sold by Keurig in its K-Cup format and as bagged ground coffee. [4]

At the time of the Keurig wholesale acquisition, the "Tully's" name and retail-store rights were retained by the now-defunct original retailer and wholesaler chain of coffee shops based in Seattle, Washington, which had been originated by Tom "Tully" O'Keefe in 1992. Its stores served specialty coffees, espresso, baked goods, pastries, and coffee-related supplies. The U.S. chain permanently closed in September 2018.

The coffee-shop chain also has overseas licensing agreements in Japan, which since 2006 have been owned by Ito En, Inc. The brand name is used for over 760 Tully's coffee houses in Japan (as of April 2022). [5]

Tully's coffee shops were well known for once following an expansion strategy of opening stores adjacent to those of the considerably larger coffee chain Starbucks, also based in Seattle.

History

Inception

Typical Tully's Coffee store Wiki-tullys-coffee.jpg
Typical Tully's Coffee store

Tully's opened its first store in Kent, Washington in September 1992. [6]

The founder of Tully's Coffee, Tom "Tully" O'Keefe, who retired from the company in 2010, planned to rival the quickly expanding Starbucks coffee. Tully's quickly developed into a strong regional specialty coffee retailer concentrated in Puget Sound, where coffee loyalty is so deep there is one coffee shop for every 4,000 people. In 2006, Tully's made its first net profit. Tully's focus was no longer on competing against Starbucks but on serving hand-crafted coffee in its local Seattle area retail coffee shops. The company had franchisees and grocery chain coffee shops in the U.S. and Asia. [7]

It operated stores in the Greater Puget Sound area of Washington, San Francisco, Los Angeles, Idaho, Arizona, California [7] and licensed its brand for use in South Korea and Japan. It had also opened stores in Singapore, Metro Manila, Beijing and Stockholm, Sweden.

Tully's opened its first Japanese outlet in Ginza, Tokyo, in 1997. [8] Tully's opened in Japan after a 33-year-old Sanwa Bank employee, Kota Matsuda, personally appealed to O'Keefe to open a chain of high-quality coffee shops in Japan. [9] Matsuda became the CEO of Tully's Coffee Japan, a joint venture between Tully's, Matsuda and several outside investors. [10] Unlike its rival Starbucks, which chose to run its stores in Japan directly, Tully's expanded in Japan through franchising. [9] Tully's sold a portfolio of intellectual property to TCJ in August 2005 for over $13 million, [11] and the Japanese tea maker acquired TCJ Ito En in 2006. [8]

In August 2007, plans for an IPO were placed on hold by the company, citing a "volatile market." This decision was made right after the company was advised by its bankers to refrain from going forward with the IPO due to a tremendously declining stock market. The company pursued alternative sources of capital and sought all strategic investment or sale opportunities as a result. Fiscal 2006 losses amounted to $9.7 million.

Sale of wholesale coffee-bean distribution business, brand, and roasting operation

Tully sold its North American wholesale coffee-bean distribution business, brand (which it licensed back for $1/year in perpetuity), and roasting operation to Green Mountain Coffee Roasters in 2009, earning $40.3 million in the deal, allowing the company to pay off 100% of its debt, including trade debt, make a cash distribution to shareholders, and maintain substantial cash reserves for the expansion of its retail business. [12] Tully's retained all retail rights for North America, and all wholesale and retail rights for the balance of the world, excluding Japan.

In 2010, Tully's Coffee International and DK Retail Co., Ltd. entered into a Master Licensing Agreement to develop up to 100 retail stores in South Korea. [13]

Founder and Chairman Tom T. O'Keefe retired in 2010. [14] [15]

US coffeeshop closures

The Tully's Coffee board and management filed for Chapter 11 bankruptcy in October 2012, citing low cash reserves and the need to renegotiate leases with landlords. At the time of the filing, Tully's had recently closed or was about to close 17 unprofitable company-owned stores. [15] Global Baristas, an investment group led by actor Patrick Dempsey had the highest bid of US$9.15 million to buy Tully's at a bankruptcy auction on January 3, 2013. [16] U.S. Bankruptcy Court Judge Karen Overstreet subsequently approved the sale to Global Baristas, rejecting objections from Starbucks and other prospective buyers. [17] The deal became final on June 30, with all employees keeping their jobs and getting a bonus of two vacation days as a "thank you" for their commitment to the company. Dempsey later backed out of the partnership and filed a lawsuit against his former partner and attorney Michael Avenatti. [18] [19]

In September 2017, Tully's Coffee announced it would close 12 locations in the Puget Sound region that were located inside Boeing facilities, including the Everett and Renton assembly factories. [20] They had originally opened in 2006 as part of an agreement between the two companies. [21]

On March 8, 2018, Tully's announced that it was closing its remaining stores temporarily due to a lack of coffee. [22] Later that month, many Tully's locations remained closed with eviction notices posted by landlords indicating the lack of payment.

In April 2018, Tully's coffee was sued by Daytona International Speedway. [23]

Tully's US coffeehouse business was officially closed when Keurig and Global Baristas entered a permanent injunction in September 2018. Global Baristas agreed to never operate a coffee chain, or any other food or beverage business, under the name again, and Keurig will continue to sell Tully's branded coffee. [24]

An involuntary Chapter 7 bankruptcy liquidation petition was filed against Global Baristas in October 2018. [25]

Tully's still operates overseas through franchise agreements, with 760 stores in Japan as of April 2022. [26]

Related Research Articles

<span class="mw-page-title-main">Starbucks</span> American multinational coffeehouse chain

Starbucks Corporation is an American multinational chain of coffeehouses and roastery reserves headquartered in Seattle, Washington. It was founded in 1971 by Jerry Baldwin, Zev Siegl, and Gordon Bowker at Seattle's Pike Place Market initially as a coffee bean wholesaler. Starbucks was converted into a coffee shop serving espresso-based drinks under the ownership of Howard Schultz, who was chief executive officer from 1986 to 2000 and led the aggressive expansion of the franchise across the West Coast of the United States.

<span class="mw-page-title-main">Seattle's Best Coffee</span> Coffee retailer and wholesaler

Seattle's Best Coffee LLC is a subsidiary of Nestlé whose brand is used to sell wholesale coffee, ground coffee, and coffee K-cups. While this brand used to have coffeehouses in the United States, it no longer advertises them on its website. Some of these coffeehouses have converted to Starbucks while Starbucks previously owned this brand. Focus Brands owns the franchising rights for this brand's coffeehouses for international markets and military bases.

<span class="mw-page-title-main">Timothy's World Coffee</span> Canadian coffee roasting company and coffeeshop chain

Timothy's World Coffee is a large Canadian coffee roasting company and chain of coffeeshops.

<span class="mw-page-title-main">The Coffee Bean & Tea Leaf</span> American coffee shop chain

The Coffee Bean & Tea Leaf is an American coffee chain founded in 1963. It is owned and operated by International Coffee & Tea, LLC, which has its corporate headquarters in Los Angeles, California.

<span class="mw-page-title-main">Torrefazione Italia</span>

Torrefazione Italia is a high-end brand of Starbucks coffee beans sold in grocery stores. It started out as its own coffeehouse chain before being acquired by Starbucks in 2003.

Diedrich Coffee was a coffee company based in Irvine, CA. Its first coffee house in Orange County, California was opened in 1972.

Keurig is a beverage brewing system for home and commercial use. The American company Keurig Dr Pepper manufactures the machines. The main Keurig products are K-Cup pods, which are single-serve coffee containers; other beverage pods; and the proprietary machines that use these pods to make beverages.

Keurig Dr Pepper Inc., formerly Green Mountain Coffee Roasters (1981–2014) and Keurig Green Mountain (2014–2018), is a publicly traded American beverage and coffeemaker conglomerate with headquarters in Burlington, Massachusetts, and Frisco, Texas. Formed in July 2018, with the merger of Keurig Green Mountain and Dr Pepper Snapple Group, Keurig Dr Pepper offers over 125 hot and cold beverages. The company's Canadian business unit subsidiary operates as Keurig Dr Pepper Canada.

<span class="mw-page-title-main">Barista (company)</span> Indian coffee drink company

Barista is a chain of espresso bars and cafes that operates in the Indian subcontinent. It is headquartered in Gurugram, India, and maintains outlets across India, and in other regional countries such as Sri Lanka, and Maldives. It is the second oldest coffee house chain in India and is currently India's second-largest coffee chain with over 425 cafes as of March 2024. It also sells a number of FMCG products through Modern & General retail stores across multiple locations.

Teavana Corporation was an American tea company, which previously had locations throughout the United States, Canada, Mexico, and the Middle East. Starbucks acquired Teavana in 2012, and in 2017, Starbucks announced it would close all Teavana locations by 2018. As of 2022, a very limited variety of Teavana products continue to be sold at Starbucks.

<span class="mw-page-title-main">Bess Eaton</span> Coffee shop chain in the United States

Bess Eaton or Bess Eaton Management LLC is a small chain of coffee shops based in Rhode Island and Connecticut, serving doughnuts, bagels, and muffins. It started in 1953, grew to over 50 shops throughout southern New England, was sold to other chains following bankruptcy in 2004. The chain reopened in 2011 under new ownership. As of 2023, there are three locations: two in Rhode Island and one in Connecticut.

Seattle is regarded as a world center for coffee roasting and coffee supply chain management. Related to this, many of the city's inhabitants are coffee enthusiasts; the city is known for its prominent coffee culture and numerous coffeehouses.

<span class="mw-page-title-main">Crazy Mocha Coffee Company</span> Pittsburgh cafe chain

Crazy Mocha Coffee Company is a coffeehouse chain in the Pittsburgh, Pennsylvania region. As of August 2021, the chain has 10 locations.

<span class="mw-page-title-main">Union Hand-Roasted Coffee</span> British coffee roasting business

Union Hand-Roasted Coffee is a privately owned British coffee roasting business based in East London, United Kingdom. The company was founded in 2001 by Jeremy Torz and Steven Macatonia. Coffee House says the company "effectively bridges the definitions of independent and mainstream" as they work according to craft principles while still selling their products in supermarkets.

<span class="mw-page-title-main">Coffee wars</span> Competition between coffee businesses for market share

Coffee wars, sometimes referred to as caffeine wars, involve a variety of sales and marketing tactics by coffeehouse chains and espresso machine manufacturers to increase brand and consumer market share. In North America belligerents in these wars typically include large coffeehouses, such as Starbucks, Dunkin', McDonald's, and Tim Hortons. According to The Economist, the largest coffee war of the late 2000s was between Starbucks and McDonalds in the United States. The U.S. market has, since the early 2010s, been primarily contested by its two largest players, Starbucks and Dunkin'. Since 2020, competition over the Chinese coffee market has intensified between Starbucks and Luckin Coffee.

<span class="mw-page-title-main">Stealth Starbucks</span> Starbucks coffeehouse that does not advertise the Starbucks brand

A stealth Starbucks is a Starbucks coffeehouse that does not advertise the Starbucks brand. These stores are operated in metropolitan areas to do market research on how customers react to experiments in coffee service and coffeehouse design.

<span class="mw-page-title-main">MOD Pizza</span> American fast-casual pizza chain

MOD Pizza is an American fast-casual pizza restaurant chain based in Seattle, Washington. Founded in 2008, MOD has more than 560 locations as of December 2023 in the United States and two locations in Canada.

<span class="mw-page-title-main">Nespresso</span> Coffee brand owned by Nestlé S.A.

Nestlé Nespresso S.A., trading as Nespresso, is an operating unit of the Nestlé Group, based in Vevey, Switzerland. Nespresso machines brew espresso and coffee from coffee capsules, a type of pre-apportioned single-use container, or reusable capsules (pods), of ground coffee beans, sometimes with added flavorings. Once inserted into a machine, the capsules are pierced and processed. Water is then forced against a heating element at high pressure meaning that only the quantity for a single cup is warmed. By 2011 Nespresso had annual sales in excess of 3 billion Swiss francs. The word Nespresso is a portmanteau of "Nestlé" and "Espresso", a common mechanic used across other Nestlé brands.

<span class="mw-page-title-main">Criticism of Starbucks</span> Criticisms of Starbucks corporation

Starbucks, an American coffee company and coffeehouse chain, is the subject of multiple controversies. Public and employee criticism against the company has come from around the world, including a wide range issues from tax avoidance in Europe, anti-competitive practices in the United States, human rights issues in multiple countries and labor issues involving union busting, questions about pay equity and ethics in partnerships in Africa.

Starbucks Reserve is a program by the international coffeehouse chain Starbucks. The program involves operation of worldwide roasteries; currently six are in operation. Also part of the program are 28 coffee bars preparing Starbucks Reserve products, what Starbucks considers its rarest and best-quality coffees, usually single-origin coffees. Some Starbucks Reserve coffee is also sold in about 1,500 of the chain's traditional outlets.

References

  1. ↑ "Stormy Days for Tully's Coffee". Seattle Weekly . 4 April 2018. Retrieved 7 August 2018.
  2. ↑ "Stormy Daniels' lawyer once bought a coffee chain for $9 million with a famous Hollywood actor — and all the shops mysteriously closed earlier this year amid dozens of lawsuits". businessinsider.com. Retrieved 7 August 2018.
  3. ↑ "What has happened to Seattle's Tully's Coffee?". Mynorthwest.com. 14 June 2018. Retrieved 7 August 2018.
  4. ↑ "Shop All Beverage K-Cup® Pods, Bags, & Cans | Coffee, Tea, & More | Keurig".
  5. ↑ "Taste The Difference | TULLY'S COFFEE - タリーズコーヒー". www.tullys.co.jp.
  6. ↑ "Tully's Coffee: A Fully Handcrafted Coffee Roaster!". Tullyscoffeeshops.com. Archived from the original on 2018-08-07. Retrieved 2012-10-24.
  7. 1 2 "'McDreamy' Wins Tully's Coffee". ABC News. 2013-01-04. Retrieved 2017-11-14.
  8. 1 2 "トップメッセージ |会社情報 |TULLY'S COFFEE - タリーズコーヒー". www.tullys.co.jp (in Japanese). Retrieved 2018-11-19.
  9. 1 2 Yoshida, Reiji (2002-01-19). "Coffee shops on different tracks in Japan". The Japan Times Online. ISSN   0447-5763 . Retrieved 2018-11-19.
  10. ↑ "Tully's Coffee forms Tully's Coffee Japan". www.bizjournals.com. 1998-05-20. Retrieved 2018-11-19.
  11. ↑ "Form 8-K". www.sec.gov. Retrieved 2018-11-19.
  12. ↑ "Vermont coffee company will buy Seattle brand". The Boston Globe . 2008-09-16. Retrieved 2012-10-24.
  13. ↑ "Tully's Coffee Plan 100 Locations in South Korea". Chainleader.com. Retrieved 2012-10-24.
  14. ↑ Allison, Melissa (2010-03-26). "Tom O'Keefe, founder of Tully's Coffee, retiring as chairman in June". Seattle Times . Retrieved 2012-10-24.
  15. 1 2 Allison, Melissa. "Struggling Tully's new plan: bankruptcy protection | Business & Technology". The Seattle Times . Retrieved 2012-10-24.
  16. ↑ Allison, Melissa (January 3, 2013). "Patrick Dempsey, TV's "McDreamy," wins bid to buy Tully's". The Seattle Times . Retrieved 2013-01-04.
  17. ↑ "Tully's tussle over: Judge rules in favor of Patrick Dempsey's group". Bizjournals.com. Retrieved 7 August 2018.
  18. ↑ Dolan, Michael Finnegan, Maura (7 April 2018). "Trump meets his match: Stormy Daniels' combative lawyer Michael Avenatti". Los Angeles Times . Retrieved 7 August 2018.{{cite web}}: CS1 maint: multiple names: authors list (link)
  19. ↑ "Dempsey group closes on Tully's deal, offers jobs to all workers". The Seattle Times . Retrieved 7 August 2018.
  20. ↑ Greenstone, Scott (September 20, 2017). "12 Tully's Coffee locations at Boeing to close, with each side blaming the other". The Seattle Times. Retrieved August 11, 2023.
  21. ↑ Corliss, Bryan (February 27, 2006). "Tully's to open four coffee shops at Boeing plant". The Everett Herald . Retrieved August 11, 2023.
  22. ↑ Grunbaum, Rami (March 8, 2018). "Tully's suspends store operations for lack of coffee". The Seattle Times. Retrieved April 11, 2018.
  23. ↑ Grunbaum, Rami (April 5, 2018). "Latest legal blow to Tully's Coffee comes from … Daytona Speedway". The Seattle Times. Retrieved May 6, 2018.
  24. ↑ Taylor, Kate (October 24, 2018). "The coffee chain once purchased by Michael Avenatti and Patrick Dempsey is finally, truly dead". Business Insider.
  25. ↑ Taylor, Kate (11 April 2019). "Unpaid taxes, abruptly closed locations, and employee rebellions: Inside the 6-year downfall of Michael Avenatti's coffee chain". Business Insider . Retrieved 26 January 2024.
  26. ↑ ITO EN Ltd Financial Results Presentation for FY2021 (PDF) (Report). p. 16.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.