The Fair Trade organic coffee industry is increasing, which is great news for farmers

Producers of coffee need to take notice of a growing demand for Fair Trade organic beans.  In 2009 alone the market sales were at 1.4 billion dollars, which blows away the standard coffee competition.

This is evidenced in the last four years where organic coffee demand has increased by 21 percent on average, compared to only one percent for regular coffee.  That is a substantial difference and is expected to continue to rise.

Organic coffee is popular for several reasons.  First, it’s healthier.  The beans do not contain harmful chemicals or pesticides.  Second, it’s great for the environment because growers use responsible practices that actually replenish the soil.  And third, it helps support small organic coffee growers, especially in third world countries, and their prospective economies.

There are around 40 countries that currently produce organic coffee, all of which are accountable to the Organic Trade Association and that guarantees to consumers that the coffee is one hundred percent organic.  These countries include Mexico, Brazil, Costa Rica, North America, Bolivia, El Salvador, and Nicaragua.  The OTA was formed in 1975 in North America and has around 1,400 members today.

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With the extended expiration date passing on January 29, 2010, Peet’s has announced they will extend their offer to purchase Diedrich Coffee to March 1, 2010. The previous expiration date was December 15, 2009. The original stock merger announcement was November 22, 2009 when Green Mountain Coffee Roaster’s, Inc. had a superior offer to purchase Diedrich. GMCR had offered $35.00 per share in cash to Peet’s original offer of $32.50 per share in cash and stock.

The merger of the two companies would enhance competition in the K-Cup single serve market. Peet’s felt that the GMRC bid would face antitrust issues.

The tender offer consists of a cash and stock exchange valued at $26.00 per share, the original offer price from Peet’s. The offer commenced on November 17, 2009, all other terms of the deal remain intact. Approximately 16,007 shares of Diedrich common stock has been tendered as of this date.

HSR, the Hart-Scott-Rodino Antitrust Improvements Act, expired on December 14, 2009.

Cooley Godward Kronish LLP is acting as Peet’s legal team, Simpson Thatcher & Bartlett LLP are advising on antitrust issues. Morgan Stanley and Jesse Capital management are their financial advisors.

Peet’s has filed a Form S-4 and a tender offer statement on Schedule TO with the SEC. Diedrich has filed on Schedule 14D-9.

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