Friday, July 17, 2009

You Had Me At Venti

Starbucks Experiments with New Name, Adding Alcohol to its Menu
Don't expect grande wines or venti beers anytime soon at your local Starbucks. (SBUX) But in a move to attract hard-to-find evening business, the struggling coffeehouse chain is about to test the addition of wine and beer to the menu at one of its Seattle stores, which it has even given a new name. The store, opening next week, is called "15th Ave. Coffee and Tea inspired by Starbucks" — a reflection of the neighborhood in which it's located. Starbucks plans to create two more similar stores in the Seattle area at locations that aren't currently Starbucks stores. And if the concept works, it could be tested in other cities, says Major Cohen, senior project manager at Starbucks. For Starbucks, which has suffered a humbling mix of closed stores, employee layoffs and same-store sales declines during the recession, the move is an attempt to extend the brand into the evening, when business is typically at its slowest. The first store, which will look very different from a typical Starbucks, will serve a half-dozen kinds of beers and wines — most with connections to the Northwest. A bottle of beer or a glass of wine will sell for $4 to $7, Cohen says. Beer and wine will not be sold to go because of state law, he says. "We'll be equally as proud of our beer and wine as we are of our coffee," Cohen says. He says he didn't yet know if this concept would be incorporated into all Starbucks stores if it's successful. "If you stop innovating, you're dead," says Scott Bedbury, CEO of consulting firm Brandstream and former marketing chief at Starbucks. While Bedbury likes the move — which he says is common for European coffeehouses — it also could twist the chain's hard-earned image, he warns. "The reason Starbucks became the number one place to go for a blind date is because women are comfortable there — and the men aren't drunk." The test move to sell alcohol is clearly an attempt to fight off growing competition from McDonald's and Dunkin' Donuts, says Ron Paul, president of Technomic, a restaurant consulting firm. "But if I were sitting in Seattle, I'd go after the evening snack and dessert business, not alcoholic beverages."

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