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Delhi Wine Club
Starbucks Sees Bucks in its Stars thru Wine

Posted: Friday, 22 October 2010 12:21

Starbucks Sees Bucks in its Stars thru Wine

Oct 22: With the Starbucks store re-opening last Monday at the Olive Way location on Capitol Hill in Seattle, the company is ready to test the revamped and redesigned marketing approach, by adding regional  wine, beer and gourmet delicacies in the Menu, and the stars may foretell big bucks through the additional business, but it is too early to tell if the gamble will pay off.

There appears to have been a lot of buzz and media interest especially in the US as the world’s eyes are focused to notice if this signifies a change in trends, including in India where Barista copied the concept followed by Café Coffee Day but with lukewarm results so far. DelWine had already reported in detail about the renovation and the changed concept, on the 28th June, 2010 issue - A Starbuck Wine Idea for Barista

Starbucks had experimented earlier with two coffee shops and named them simply by the street locations, calling them 15th Avenue Coffee & Tea and Roy Street Coffee & Tea, over a year ago. Very subtle "inspired by Starbucks" signs etched on their doors were the only tell tale signs. These two cafes also served beer and wine and offered live entertainment for the customers, a part of the plan which worked out quite successfully.

“If this new design is a hit, Starbucks could ultimately expand pieces of it to as many as half of its stores globally. A minor redesign can cost $25,000, while a new construction can exceed $400,000,”  reportedly Arthur Rubinfeld, global development chief at Starbucks, said in an interview with USA Today. Starbucks currently has over 16,700 stores worldwide This would imply a huge sum if  around 8,000 stores were to be converted, costing over $200 million to only revamp the existing stores.

Besides the huge investments, there are other issues, relating to the décor and the kind of ambience the customers would prefer. Generally, the stores have been known for the ‘quick fix’ that most of its clients need. Most do a good business till 2 pm and then the business goes flat. While the company is obviously betting on additional revenues, the customers-especially women buyers who like the safe and informal atmosphere, may be tuned off with the changed ambience and possible social problems due to excessive drinking, as has been detailed by delWine earlier.

Then there will be issues of licensing-even in the US, the states have different laws. In California for instance, the very first step would be to convince the police that it would not result in excessive crimes and that the students would not be affected in anyway. If the company is unable to convince them, they cannot move to the next step. So far, the company has not applied for any license there.

In the new format, the staff would need additional training on selling wine and beer in addition to the coffee for which the baristas are trained. As one has seen in India, one important factor that wine consumption has not taken off in the coffee shops despite a year in existence and experimentation is improper training of staff which has no clue about wine or how to market it.

According to experts, this concept is a sign of desperation or a stroke of genius. Starbucks is considered to be the ubiquitous chain of overpriced latte lounges and has been under pressure on quality issues of late as well. In fact, the company announced last week to reduce the speed of making the coffee to give a better, hotter product that would apparently give a better coffee experience-more on the lines of European coffee shops or the Independents who have been selling coffee for 40 years, when Starbucks came into existence- more. It is too early for the industry experts to bet at this stage.

For another article, visit
Starbucks: Cappuccino, Chamomile or…Chianti?


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