Flashback

Starbucks: Coffee, tea, and beer?

Hit hard by the recession and fast-food competitors, the coffee giant is testing the idea of selling alcohol — but will it turn off core customers?

Care to trade in your cup of joe for something kickier? A Starbucks "test cafe" in Seattle will sell local premium wine and beer in addition to coffee and tea when it reopens later this year. The experiment in brand rethink, dubbed "Olive Way," will also diverge from Starbuck's iconic green-and-tan color scheme and offer a wider food menu. Can alcohol help re-energize a chain that has had to shutter hundreds of locations? (Watch a CBS report about Starbucks' beer business)

Morning sales alone can't carry the business anymore: The bottom line is that Starbucks has to drive more business throughout the day, says InvestorPlace at MSN.com. McDonald's and Dunkin' Donuts have kept the coffee business "increasingly competitive" and Starbucks knows it needs to keep innovating. So this plan, while inevitably controversial, does makes sense. "Starbucks gets into beer and wine biz"

This could easily backfire: If I'm interested in drinking, I look for a "place where I can engage people socially without fear of offending them," says Dave McGurgan at PhillyBurbs.com. Starbucks' efforts to "[bring] in new customers with booze" may well end up "offending their core coffee customer base."
"Wine at Starbucks?"

Worry about the redesign, not the beer: This could also offend customers who are there to work, says Carol Tice at BNET.com. Starbucks says it hopes to "turn coffee making into entertainment" with a new "coffee theater" layout that moves those loud espresso machines into the middle of the space. How will you find a "quiet corner...to make a call or think about that proposal you’re writing"?
"Starbucks brewing up some change --some bad, some good"

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