Starbucks to add beer, wine to menu at select coffee shops

Four to six new or remodeled stores in Southern California will offer alcoholic drinks by the end of this year, as will some shops in Atlanta and Chicago.

 

Starbucks customers are about to get a different kind of buzz. Already a go-to for morning commuters and afternoon pick-me-ups, the coffee giant is aiming to expand the happy hour crowd by offering wine and beer at select Southern California locations.

Starbucks said it would bring booze to four to six new or remodeled stores in the region by the end of this year and planned to do the same to a small group of locations in Atlanta and Chicago. In addition, patrons could order "premium food" such as savory snacks, small plates and hot flatbreads.

The chain began testing its alcohol menu in its hometown of Seattle in 2010. It now offers beers for $5 and wines by the glass for $7 to $9 in five locations in that city and one in Portland, Ore. Beer options include Rogue Dead Guy Ale, and the wine menu features a Pinot Noir from Oregon, a Prosecco from Italy and a Malbec from Argentina.

The introduction of beer and wine was met with skepticism by some customers at a downtown Starbucks on Monday afternoon.

"If I wanted a beer, I'd go to a bar," said Doug Tanaka, 48, a police officer who lives in Valencia. "I bring my grandkids in here. I don't want to have to deal with a drunk if I'm having coffee."

Sean Petersen, 39, who works for the California Department of Transportation as an engineer, said that beer and wine seemed an odd fit with the coffee chain.

"When I come to Starbucks," Petersen said, "alcohol is not what I'm thinking about."

But Jonathan Tam, an engineer and graduate student ensconced in the Starbucks with his iPad and laptop, said he'd be willing to give a cafe-bar hybrid a chance.

"It's hard to imagine as it is right now, but I'd come and see what it's like," said Tam, 27. "Anywhere there's alcohol, there are people cheers-ing."

Starbucks said its target vibe is relaxation.

The locations will begin serving alcohol after 2 p.m. on weekdays and after noon on weekends, local regulations permitting, the company said.

"As our customers transition from work to home, many are looking for a warm and inviting place to unwind and connect with the people they care about," said Clarice Turner, senior vice president of U.S. operations.

All of the beer and wine will be kept behind the counter rather than on shelves or in display cases. Customers under age 21 will still be allowed inside.

Starbucks is looking to differentiate itself from competitors as varied as Dunkin' Donuts, fast-food behemoth McDonald's Corp. and the fast-casual Panera Bread Co. chain, analysts said.

It's a "natural extension" for Starbucks to move into specialty beverages, said Jason Moser, an analyst with Motley Fool. The coffee chain in November bought San Bernardino natural juice company Evolution Fresh Inc. for $30 million, promising to launch a series of "wholesome" juice shops.

But Moser said Starbucks' expansion into beer and wine was different from its foray into juice.

"They're two opposite sides of the coin," Moser said. "Evolution Fresh was a true effort to move into a brand new business. But alcohol is a complementary offering to what they already have, something that is not going to offer billions of dollars of growth.

"They're not trying to take business away from bars. They're just offering their existing customers another option. They've always been very quick to try new things."

Starbucks, which hit a rough patch in 2008 that caused founder Howard Schultz to retake the reins of the company, is currently in a solid position. In the U.S., the company's sales at stores open at least a year rose 8% in fiscal year 2011. Overall, its revenue last year rose 9.3% to $11.7 billion with income soaring 31.7% to $1.2 billion.

In 2012 Starbucks expects to open 800 new stores around the world, half of them in the Americas. The company will release its first-quarter earnings Thursday.

On January 23, Starbucks stock fell 1.7%, or 81 cents, to $47.34.