August 19, 2015
From Coffee to Cabernet: Is Starbucks Losing Focus or Reinforcing its Brand?
Starbucks recently announced that 24 more locations across the country will become Evening Stores, meaning they will offer beer, wine, and “savory small plates” (think truffle mac and cheese and goat cheese flatbread) in the late afternoon and evening hours. That will bring the number of beer and Bordeaux barista locations to 70 nationwide.
Is this a sign that Starbucks is losing its focus, or is this another innovative marketing plan for the company? Only time will tell, but Starbucks has been testing this concept since 2010 in various markets. In its fact sheet, Starbucks cites research that shows that there is a big overlap between coffee lovers, wine lovers, and beer lovers (and we assume they don’t just mean the need for coffee in the morning after too much wine or beer the night before). So they are not trying to introduce a whole new audience to the Starbucks brand. Instead, they are trying to find more ways to connect people with a company they already know.
In addition, Starbucks has been incredibly successful turning its coffee stops into destinations. Many people don’t just swing by for a cup of coffee and leave. They stay and use the free wi-fi and turn the locations into remote offices. So the idea of people hanging out at Starbucks for a glass of wine after work isn’t a big stretch. That is why the company hopes to have beer and wine on the menu at 2,000 of its 12,000 coffee shops in the U.S. within the next five years. It has also launched the program in the UK.
Another factor that bodes well for the campaign is that Starbucks is making this change from a position of strength. It is not a desperate move because their coffee business is tanking. In fact, the company announced record quarterly revenue of $4.9 billion in July.
The slow and steady roll out of the program suggests that Starbucks is carefully selecting the next locations, measuring a range of variables at each store, and using that data to inform the next steps in the campaign. Based on Starbucks expansive brand appeal (and the lure of bacon-wrapped dates), it is fair to expect the Evening Stores to get early traffic when they first open. How much staying power they will have will depend on Starbuck’s ongoing efforts.
Melissa Arnoff is a Senior Vice President at LEVICK and a contributing author to Tomorrow.