Jul 31, 2003

Peet's Coffee & Tea, Inc. to Expand Its Grocery Distribution to 344 Ralphs Stores Throughout California

EMERYVILLE, Calif. - July 31, 2003 - Peet's Coffee & Tea, Inc. (NASDAQ: PEET), a specialty coffee roaster and marketer, today announced the distribution of its fresh, deep-roasted coffee within Ralphs, a division of The Kroger Company (NYSE: KR). A selection of Peet's most popular coffees will be offered in 43 Ralphs stores throughout Northern California and 301 Ralphs stores in Southern California, bringing the total store count to 344.

Peet's deep-roasted coffees, in whole bean and ground varieties, will be featured in its own customized wooden racks and packaged in 12-ounce bags. The following product selection will be made available at Ralphs: Espresso Forte, French Roast, House Blend, Decaf House Blend and Major Dickason's Blend.

"We are very pleased with our new relationship with Ralphs, to be able to provide our customers throughout California the time-saving convenience of purchasing our fresh, deep-roasted coffees at their local grocery store, " said Patrick O'Dea, president and chief executive officer, Peet's Coffee & Tea, Inc. "With our emphasis on freshness, Ralphs customers are guaranteed that only our freshest coffees are presented on the shelves. Peet's dedicated direct store delivery network allows us to roast orders by hand, immediately after they are received, and then packaged within minutes to be delivered fresh to the store. We also manage a strict product rotation schedule."

About Peet's Direct Store Delivery 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 representatives provide a full-service direct store delivery program, delivering fresh coffee to grocery stores weekly for a no finished goods inventory for grocers. Peet's also provides branded racks for attractive and effective in-store merchandising. Most importantly, Peet's coffees are specially packaged and dated with a best-buy date to ensure the freshest product available.

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 71 company-owned stores in five 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 1-800-999-2132. Peet's Coffee & Tea, Inc. shares are traded under the symbol PEET.

About Kroger
Headquartered in Cincinnati, Ohio, Kroger is one of the nation's largest retail grocery chains. At the end of the third quarter of fiscal 2002, the Company operated (either directly or through its subsidiaries) 2,461 supermarkets and multi-department stores in 32 states under approximately two dozen banners including Kroger, Ralphs, Fred Meyer, Food 4 Less, King Soopers, Smith's, Fry's and Fry's Marketplace, Dillons, QFC and City Market. Kroger also operates (either directly or through its subsidiaries) 783 convenience stores, 441 fine jewelry stores, 341 supermarket fuel centers and 41 food processing plants. For more information about Kroger, please visit our web site at www.kroger.com.

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, including those relating to estimate earnings per share and net revenues for the fourth quarter of 2002 and for the full year 2003. Because of the uncertainties inherent in these forward-looking statements, the Company's actual results could differ materially from those set forth in forward-looking statements. The Company's estimates regarding its 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, risks arising from accounting adjustments; the Company's ability to implement its business strategy, attract and retain customers, and obtain and expand its market presence in new geographic regions; the availability and cost of high quality Arabica coffee beans; consumers' tastes and preferences; and competition in its market as well as other risk factors as described more fully in the Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 30, 2001.