Peet's Coffee & Tea, Inc. (Nasdaq:PEET), a specialty coffee roaster and marketer, today announced the addition of several new grocery partners that will offer Peet's fresh, deep-roasted coffees and hand-selected teas to their customers. The new distribution gains will bring the total store count for Peet's grocery program to 130 accounts by the end of October 2001. The goal of Peet's multi-channel distribution program is to meet consumer demand for fresh, high-quality coffee at home, work, restaurants and in company-owned retail stores.

Peet's expanded grocery distribution program incorporates several new accounts including the following: 32 Vons Pavilions in Southern California, six Lunardi's Markets in Northern California, Draeger's Market in San Mateo, Calif., and Jeannine's Bakery at Gelson's Market in Santa Barbara, Calif. Based on the success within existing grocery accounts, Peet's has also gained additional distribution in the following stores: eight more Andronico's Markets in Northern California and the remaining 18 Beverages & more! locations throughout California.

Under a special agreement, Peet's has opened retail stores within all six Larry's Markets in Seattle, Wash., in September. In this partnership, Peet's branded stores are being managed and operated by Peet's employees to facilitate whole bean and beverage sales, while leveraging Larry's Markets store space and customer base.

"Our new partners are all target accounts for Peet's, not only in terms of their product offerings, location and customer base; they also share our passion and commitment to high-quality products and customer service," said Chris Mottern, president and chief executive officer, Peet's Coffee & Tea, Inc. "In these partnerships, everyone benefits: grocery stores capture specialty coffee sales and increase profits, customers now have the option for more convenient shopping for their fresh, Peet's coffee and tea needs, and Peet's continues to build out target regions with our multi-channel program."

Peet's currently sells its products through five channels of distribution: company-owned retail stores; online and mail order; restaurant and foodservice; office and office distributors; and specialty grocers and gourmet food stores.

About Peet's Grocery Program

Peet's is highly selective in developing its grocery accounts. All partners must adhere to the company's strict freshness, quality and presentation standards to ensure that their customers experience Peet's coffees and teas at their best.

Peet's uses third-party distributors to deliver fresh coffee to grocery stores every week. Because the company manages daily distribution of its products, there is no warehouse, maintenance or servicing requirements for the grocer. Peet's also provides branded racks to be placed in the bakery section, or other fresh food sections, to reinforce to customers the freshness of Peet's coffees and teas and provide attractive and effective merchandising. Most importantly, coffee packages are roast-dated and sealed to ensure product freshness.

About Peet's Coffee & Tea, Inc.

Founded in Berkeley, Calif., in 1966, Peet's Coffee & Tea, Inc. is a specialty coffee roaster and marketer of fresh, deep-roasted whole bean coffee for home and office enjoyment. Peet's fresh-roasted coffee, hand-selected tea and related items are sold in several distribution channels including specialty grocery and gourmet food stores, online and mail order, office and restaurant accounts and 60 company-owned stores in four states. Peet's is committed to strategically growing its business and to maintaining a unique culture and focus on customer satisfaction. For information about Peet's Coffee & Tea, Inc. visit www.peets.com or call 800/999-2132. Peet's Coffee & Tea, Inc. shares are traded under the symbol PEET.

This press release contains statements that are not based on historical fact and are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Because of the uncertainties inherent in these forward-looking statements, our actual results could differ materially form those set forth in forward-looking statements. The Company's estimates regarding our operations and financial results are based on currently available operating, financial and competitive information. Actual future results and trends may differ materially depending on a variety of factors including but not limited to, coffee and other raw material prices and availability, successful execution of strategies and plans for expansion, competition, general economic conditions, the popularity of specialty coffee due to consumer trends, health factors or other issues, as well as other risk factors as described more fully in the Company's filings with the Securities and Exchange Commission, including our final prospectus filed on January 25, 2001.