Starbucks' Evening Program: Coffeehouse Kingpin Continues to Focus on Wine Sales
May 16, 2016
Starbuck's, the Seattle-based coffee and marketing giant quietly rolled out the Evenings program six years ago [ed: 2010], by serving wine after 4 p.m. at its Seattle Olive Way location. The program then expanded to other Washington state venues and neighboring states like Oregon, and the major markets of Chicago, Florida, Los Angeles and Atlanta followed suit. It is now a national program that is aiming for wine placements in 3,000 locations where corporate deems it profitable and wine sales are permitted by law.
The program, which features approximately 10 wines by the glass and small plates, was rolled out to bring in more business in the afternoon. The lists are regionally tailored to feature local wines where available. "Wines are priced from $6 to $15 a glass and the 4 p.m. start time may vary as the program expands," said a Starbucks' spokesperson.
"By expanding our offerings to include food and drinks that are more suitable for the evening hours, we are enhancing our role as a gathering place for the community throughout the day and into the evening," added the spokesperson. "Feedback continues to be positive and we look forward to bringing this experience to more customers around the U.S."
Implementation of the concept is going global as well. In Japan, RocketNews24 reported in March 2016 that the company was rolling out Wine Fragginos, made with Japanese blueberry wine blended with ice. The company wouldn't comment if they have any intention of launching such coffee-based drinks in the United States.
In true Starbucks' style the company also lists the calorie count for each glass of wine, as they do with their food offerings. The spokesperson said posting total calories, which vary from 140 to 150 by-the-glass, is a way to be transparent with the chain's customers.
She also said that the choice to serve wine was not related to the company's less-than-successful 2012 acquisition of the San Francisco-based La Boulange Bakery chain. The multi-unit fast casual bakery had long served wine and beer with salads and sandwiches throughout the day.
The famously tight-lipped company won't share sales figures and has even trained the managers in stores across the country (I reached out to locations in Texas, Missouri and New York) to not discuss details about the Evenings program. Multiple requests to speak to several cooperate marketing executives, who created the wine program, were not returned.
David Mowforth, the Western division manager of the Healdsburg-based Ferrari Carano, said the winery has been working with Starbucks since the outset of the program. The winery's Chardonnay is featured on Starbucks' sample Evenings menu.
"The difference with this concept is that it is taking a place that you visit in the morning for a wake up shot of coffee and moving it into a place you can visit comfortably in the evening," said Mowforth. He added that the free Wi-Fi in the evening is a smart marketing move as it allows customers to enjoy wine while they wrap up work commitments.
"The program thus far has been a success from a brand-building and exposure opportunity in [terms of] reaching new consumers. The Evenings program is still too young at this stage to see a significant benefit in sales," added Irene Habermeier, a brand director and partner at the Napa-based importer Folio Wine Partners. The company has two imported wines and one California wine approved for the Starbucks Evening program and they are sold in approximately 100 locations in four states.
"Most of the Evenings Program locations are in suburban areas, appealing mostly to moms and Millennials who are meeting up with friends or perhaps a study group in a welcoming, casual environment," she said.
Higher-volume locations can go through one to two cases of Folio wines per month, according to Habermeier. "It’s great for a national, well-recognized brand like Starbucks to create a dining segment appealing to consumers for the evenings [paired with small-plate offerings]."
The bulk of the other wine producers whose wines are listed on the sample menu declined to comment, expressing their desire to not ruffle feathers and maximize wine sales to the retail giant.
Plusses and Minuses
The move to widen beverage options in the early evening hours is obviously a smart one, as many fast casual restaurants—especially in affluent urban areas—have been ramping up revenues and broadening their demographics by offering a limited selection of wines.
Christian Miller, the Berkeley, California-based principal of Full Glass Research, agreed. "There is clearly some widening of distribution to fast-casual restaurants and a lot of experimentation," he said. "Perhaps the bellwether in this category is the Starbucks 'Evenings' initiative."
The Starbucks spokesperson says that they vet 500-plus wines to choose by-the-glass offerings for their constantly rotating store-by-store selection and that wait staff is trained to discuss the flavor attributes of the various wines. The lineup always includes red, white and sparkling wines.
The spokesperson said the chain also works in tandem with their producer partners to create the wine list. They also check to see if potential wines meet what they call basic taste profiles, if they are unique and whether they deliver in terms of cost to quality ratios.
There is a lingering concern that if the barista's focus is on coffee, he or she might not be as knowledgeable about wine as the staff in at the bar down the street. The chain doesn't have a full-kitchen facility and a glass of Chardonnay looks—and costs—very much the same wherever it may be served.