Heads Up: Starbucks Is Bringing the Booze
Starbucks (NASDAQ:SBUX) is bringing the booze. According to Bloomberg, Chief Operating Officer Troy Alstead said in a phone interview this week that Starbucks is planning on expanding its evening alcohol and light bites menu. Though the Seattle-based company expects the new rollout will take several years to boost sales, Starbucks executives are confident that consumers will respond well to the new launch that will allow them to pick up their coffee, latte, or pastry, along with their alcohol.
The world’s largest coffee chain has been working to roll out more non-coffee items as of late, including juice, tea, food, and sandwiches, and it is partly due to its executives’ recognition that customers aren’t solely visiting Starbucks stores for caffeine anymore. More and more consumers are now stopping into the chain to pick up a quick breakfast or lunch there, but there is also a noticeable surge in Starbucks stores toward the end of the day, which is why executives are trying to push its evening alcohol and light bites menu. The evening time may be too late for some people to have their caffeine, but it’s never too late for other tasty beverages.
According to Bloomberg, Starbucks first began selling alcohol in its Seattle store in October 2010 and started expanding the test to as many as twenty-five locations in Chicago, Atlanta, and Southern California in January 2012. In Chicago, the after-4 p.m. menu includes foods such as truffle macaroni and cheese, chicken skewers, Chardonnay, and chocolate fondue. Based on how the menu has performed in the Windy City, it appears as though Starbucks consumers like their wine and cheese, and now the company is ready to wine and dine its other customers all over the U.S. Alstead explained this week, via Bloomberg, “We’ve tested it long enough in enough markets — this is a program that works. As we bring the evening program to stores, there’s a meaningful increase in sales during that time of the day.”
It’s unsurprising that Starbucks is gearing up to introduce a bundle of high-profile new items to its stores — the chain has a lot of ground to cover if it wants to realize its long-term plan to almost double its market value to $100 billion, a growth benchmark Starbucks announced Wednesday, according to Bloomberg. Along with adding more food and drink items to its menus, Bloomberg highlights that Starbucks is also expanding and improving its rewards program and mobile applications, and it is testing a way for customers to order items ahead of time with their smartphones.
So Starbucks now has one eye on evening food and drinks, and one eye on its digital and technical innovation. Schultz is reportedly focusing more on the company’s digital, mobile loyalty, and electronic-commerce initiatives, while Alstead is handling Starbucks’s day-to-day operations. It is unclear who is in charge of the evening food and drinks launch, but it is likely that it is a team effort, as executives not only have to pinpoint what food and drinks to sell, but also, where to sell them. According to Bloomberg, Alstead said in his interview that the evening menu won’t work in all Starbucks cafes, and for now, the chain is concentrating on urban areas where the late-night menu has seen the most success in its tests. The menu has been shown to do the best when Starbucks is located near other restaurants and theaters, where people are out at night.
Now, Starbucks has more than 20,100 locations worldwide, including about 11,500 in the U.S. and that number is only expected to keep growing. The coffee chain is slowly but surely cracking the booze industry and hopes its sales see more than just a little buzz.