Starbucks Evenings is rapidly expanding across the U.S. as select locations become approved by the Department of Alcoholic Beverage Control for the states in which the company seeks to serve wine and beer. Starbucks Evenings is the term the company uses to refer to its evening menu. In select locations, Starbucks that have been approved for an alcohol license may serve wine and beer to customers after 4 p.m. In addition to the carefully selected wine and craft beers provided on the Starbucks Evenings menu, customers can also enjoy small, savory food items to pair with their beverage of choice.
Since 2010, Starbucks began serving alcoholic beverages, starting with a location in Seattle, Washington, to test its evening menu. In California alone, there are more than a dozen Starbucks that serve alcoholic beverages. In May of 2015, Starbucks applied for a liquor license through the California Department of Alcoholic Beverage Control in order to expand Starbucks Evening to more than 15 Bay Area locations. According to a CNN article, Starbucks already has 70 locations that serve wine and beer and has plans to increase this number to 2,000 of its locations within the next 5 years.
According to Fortune Magazine, Starbucks generates about 73 percent of its revenue from beverage sales. With the addition of alcoholic beverages to its menu, Starbucks could expect to generate additional revenue and increase its customer base during evening hours by serving more evening friendly beverages and additional food items for customers to relax and wind down after a long day.
With the addition of beer and wine to its menu at select locations, customers may face some minor setbacks when using gift cards and rewards points. Starbucks customers may still receive rewards points for purchasing alcoholic beverages. However, rewards points cannot be redeemed for a free alcoholic beverage. This is because some states’ laws prohibit sellers and servers from giving away alcohol for free or selling alcohol for less than its value. For example, California law forbids the use of any credit tokens for the purchase of alcoholic beverages, or free goods in connection with the sale of alcohol. Cal. Bus. & Prof. Code § 25600. Sanctions for violation of state laws regarding the sale and distribution of alcoholic beverages could result in high tax penalties, and suspended or even revoked alcohol licenses. Due to the varying degrees of restrictions that are imposed by states regarding the sale of alcohol, Starbucks has adopted a uniform policy for all its locations in order to comply with state standards.
Starbucks is not the first coffee shop to serve alcoholic beverages. Many coffee shops and espresso bars around the U.S. also serve alcoholic beverages. Since coffee shops serving only coffee and non-alcoholic drinks cater largely to the morning and evening crowds, serving evening drinks like beer and wine can help keep a steady flow of loyal customers throughout the evening. With the future expansion of Starbucks locations to serve alcoholic beverages and the introduction of new menu items like truffle mac and cheese, Starbucks is projected to have about $1 billion of added revenue by 2019.
Written by: Stephan Passalacqua
© 2015, Law Offices of Stephan Passalacqua.