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Coffee Shops Expand Alcohol Activities

June 27, 2013

This fall, Starbucks will expand its Starbucks Evenings concept—coffeehouses that offer beer and wine. Additional Evenings venues will be launched in southern California, Atlanta, Chicago and the Pacific Northwest. Starbucks currently operates 20 Evenings locations—all in those markets, as well as at Washington Dulles International Airport. The company says the concept is seeing steady traffic during after-work hours and on weekends.

Starbucks is hardly the only coffeehouse brand offering beer and wine these days. The Chicago-based Coffee Studio added beer and wine to its menu in December, and co-owner Lee Corrina Cano says the move has boosted sales. “Previously, we did most of our business before 10 or 11 a.m.,” says Cano. “But we still have to pay the rent and pay our workers later in the day, so adding beer and wine made sense.”

Kudu Coffee & Craft Beer in Charleston, South Carolina installed four beer taps a few months ago. They’ve been so popular that the venue will soon expand to 15-16 taps. Co-owner Jason Bell now hosts regular beer events, including tap takeovers and meet-the-brewer nights.

“Coffee bars and cafés are increasingly venturing into the beer and wine space,” says Melanie Corey-Ferini, director of design at Dynamik Space, a Seattle-based design company that specializes in coffee shops and cafés. “It’s an additional revenue stream and draws customers for more hours of the day.” And the demographics tend to overlap. “Coffeehouse customers are usually passionate about coffee and craft beer,” Corey-Ferini adds.

Nick Carroll, assistant manager at Mudsmith, a Dallas coffee shop that opened earlier this year, says putting beer and wine on the menu has been good for business. Mudsmith offers seven craft beers on tap, priced between $6-$8. A beer-coffee cocktail called Fracker Bomb—comprised of Revolver Brewing’s Mother’s Little Fracker Stout and a shot of espresso ($8)—is particularly popular.

Most industry observers expect the trend to accelerate, as it’s a potent blend of mutual interests: coffee shops are excellent upscale marketing venues for beverage alcohol, and coffee shop operators are enjoying the incremental revenue.

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