John Puckett, Caribou Coffee's founder was working as a management consultant for Boston-based firm Bain & Company, helping develop ideas and strategies for other companies, when he decided he wanted to become an entrepreneur. His wife Kim and he decided to raise money and start a coffee company after a trip to Denali National Park in Alaska. Kim retained her job at General Motors while John moved to Minnesota to find the first site and do the financing.

Initially Caribou had worked out the concept for a five day a week schedule which was aimed at downtown office. Puckett signed a lease for the first location to be situated in the large Pillsbury Center office building. However some time later the landlord of the building decided not to lease it, as another retail tenant had exclusive rights to selling coffee in the building and had threatened to sue them. Due to this the financing for the store suffered badly as it was dependent on that specific site. So Puckett started looking for a location in the suburbs and so the first Caribou Coffee shop was started in Edina, Minnesota, a suburb of Minneapolis, in December 1992.

Arcapita was Caribou Coffee's majority shareholder. In 2002, Yusuf al-Qaradawi's involvement with the bank led to a protest of Caribou Coffee. That same year al-Qaradawi stepped down as chairman of the bank's Sharia board.

Caribou Coffee announced plans to close 80 stores in Ohio, Pennsylvania, Washington D.C., Maryland, Virginia, Georgia, Illinois and Eastern Wisconsin in May 2013 and 88 others in those locations to be converted to Peet's Coffee & Tea during 2013-2014.

Caribou locations would remain open in Minnesota, North Dakota, South Dakota, Western Wisconsin, Iowa, Kansas, North Carolina, Denver, and ten international markets. The Conversion and Closing process had been underway for quiet some time beforehand, however, with news of closings beginning at least a month earlier.

Forbes described the company's handling of the closures was as "awkward and inappropriate given that 80 stores’ worth of employees" lost their jobs. On September 29, 2014, Einstein Noah Restaurant Group Inc., operator of Einstein Bros. Bagels and other bagel restaurants, was bought by JAB Holdings, owner of Caribou and Peets.

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