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Happy Hours – Starbucks Expands Wine & Beer Sales

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Starbucks Corp., the world's biggest coffee-shop chain, which proved the world that there's nothing as paying too much for a cup of coffee, is planning to experiment with wine and beer, the two elixirs that Americans love. Food and Beverage magazines believe that Starbucks is looking to differentiate itself from competitors, by entering into an alcoholic beverage segment. Well, it seems that happy hours are back again for California and Atlanta.

This is Starbucks’ move to reach people’s sense of fun and pleasure even as trying to upgrade business during the happy hours, which is the slow afternoon and evening hours. Starbucks said Monday that it plans to sell wine, beer and premium foods, like hot flatbread sandwiches and small plates, at a few stores in Southern California and another few in Atlanta by the end of 2012. That builds on the Starbucks’ recent announcement of the same plans for about half a dozen stores in Chicago.

Skepticism in Opinions

Well, it indeed is a news that Starbucks plans to have nearly 25 stores in total to offer alcoholic beverages, which would be served at the happy hours, by the end of the year. But the introduction of beer and wine was met with skepticism by some customers at a downtown Starbucks on Monday afternoon.

Several business magazines believe that selling alcoholic beverages could anger community groups in California and complicate Starbucks’ operations. Bob Goldin, executive vice president at consulting firm Technomic said, “The new business opportunity, though termed 'happy hours', may not overshadow the headaches.” Bob Goldin’s intention was pointing to possible opposition from people who live near the cafes, difficulties obtaining liquor licenses and alcohol laws that vary from state-to-state.

Sean Petersen, who works for the California Department of Transportation as an engineer, believes that beer and wine seems an odd fit with the coffee chain. Petersen said, “When I come to Starbucks, alcohol is not what I'm thinking about.”

Though there are people who do not like the idea of associating beer and wine with Starbucks Corp., there are quite a few who are curious to see what a Starbucks café would be like once it started serving beer and wine.

Strategy at Starbucks

Seattle-based Starbucks, which is coming off a successful restructuring, recently has reported some of the industry's strongest sales trends. Its shares fell about 1.6 percent to $47.38 in afternoon trading on Monday, but are up more than 40 percent from a year ago.

There comes a time when the company needs to grow, and give other people (apart from its loyal customers) a reason to step in. This is the strategy that Starbucks applied to grow its market presence and attract new customers.

Clarice Turner, senior vice president at Starbucks U.S. operations said, “The new stores, which will be located in Chicago, Atlanta and Southern California, will be larger and seat more patrons than regular Starbucks cafes.” Starbucks is also working on creating a perfect bar menu, for the happy hours, to go well with the local taste preference of the customers.

To broaden its market beyond serving coffee, Starbucks also planned to open stores that would sell drinks such as pomegranate lemonade and protein shakes. To make this possible, Starbucks acquired juicemaker Evolution Fresh Inc. for $30 million in November last year.


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