fbpx
https://blog.euromonitor.com/wp-content/uploads/2018/05/iconEMICroppedSquare-150x150.png

By: Elizabeth Friend

Starbucks has been slowly launching its new US Evening menu in select Pacific Northwest stores since 2010, but this year the company expanded the program to Chicago, Atlanta and Southern California. Available after 4 p.m., the new menu includes beer, wine, appetizers, desserts and shareable small plates designed to give Starbucks customers more options for indulgence and relaxation in the evening hours. Euromonitor International visited one such Chicago outlet to observe how the program fits in with the company’s existing positioning.

Evening menu items

StarbucksSpread

Source: Euromonitor International

The third place – after dark

While this marks a very different food and beverage offering for the specialist coffee shop, in many ways the new programme is not as divergent as it may initially seem. Starbucks has always based its global positioning on the idea of filling demand for a “third place”, neither home nor office, where consumers can relax, drink a premium coffee beverage and read a book, work on a laptop, or chat with friends. In the US Starbucks traffic is heaviest in the mornings, but in many parts of the world cafés count evenings as among their business dayparts. In South Korea, for example, cafés are places young people can go to spend time with friends, a fact that has given rise to a number of themed cafés, such as those where patrons can play with dogs or cats, decorate a cake, or get their nails done. Similarly in the United Arab Emirates and other Middle Eastern countries where drinking alcohol is not a widespread part of the culture, cafés serve as an alternative to bars, where people can gather to drink and talk with friends. Cafés are also frequently seen as a cheaper alternative to dining out, offering a comfortable, indoor social environment at low cost.

With the new menu, Starbucks simply moves to extend the third place benefit into the evening hours in a context that is more likely to resonate with a US consumer. The Evening program provides beverages that facilitate relaxation rather than stimulation, and food that is conducive to grazing and friendly conversation, putting the coffee shop in competition with neighbourhood bars and restaurants for casual evening traffic.

New outlet design

StarbucksRoom

Source: Euromonitor International

Some of the programme’s key features include:

  • A Varied Menu: The programme offers “bites” like warmed rosemary and brown sugar cashews, appetizers including parmesan-crusted chicken skewers with honey-Dijon dipping sauce, and small plates such as Truffle Mac & Cheese and various premium flatbreads. Rounding out the menu is a small selection of desserts including a fondue platter and the customer’s choice of any three Starbucks Petites desserts. This widely varied menu serves any number of potential evening eating occasions, from drinks after work, to a light dinner before a movie or a savoury snack during an after-hours work session.

Shareable plates and group-friendly desserts

StarbucksMenu

Source: Euromonitor International

  • Relaxing Beverages: The new menu includes both beer and wine, which is available by the glass or by the bottle, chosen by Starbucks sommeliers and tailored to individual market preferences. This Chicago outlet serves white, red, sparkling white and rosé options, giving consumers a range of choices.
  • Elegant presentation: Beyond its new food and beverage offerings, Starbucks has taken steps to reinforce the higher-end feel to the new menu. Food items are elegantly presented on various styles of flatware, and the outlet now offers silverware rather than plastic. Wine is served in modern stemless goblets, and beer is likewise served in custom glassware.

Premium touches include food presentation

StarbucksBacon

Source: Euromonitor International

  • Evening-friendly Décor: Those outlets offering the new menu in Chicago have also undergone a redesign that launched with the Evening programme. The new décor has a decidedly after-hours feel with pub tables and a loft-like design that incorporates black and white photographic murals, exposed brick walls and low lighting accented with blown-glass chandeliers.
  • Flexible Seating: The design incorporates a range of seating options conducive to groups of all sizes, such as large communal tables, counter seating and armchairs grouped around occasional tables. Though low lighting lends itself to the evening atmosphere, lounge sections are equipped with bright, optional reading lights so as not to alienate core customers.

Varied seating and modern decor

StarbucksChairs

Source: Euromonitor International

  • Dining-in extras: Starbucks has also clearly made facilitating longer stays a goal, with a menus bias toward shareable, snacking items and an elevated dining atmosphere. Further reinforcing the neighbourhood bar feel, baristas offer complimentary toasted pumpkins seeds with the purchase of a glass of wine.

A New Starbucks Customer?

While Starbucks’ stated goal is clear—the company aims to serve dine-in demand at night by offering a modified version of the same features and benefits it currently serves during the day—the question of how much of this demand actually exists is a good one. During the morning and afternoon hours, Starbucks outlets are often packed with dine-in customers, so much so that gaining a seat often requires luck and, at peak times, even a bit of cutthroat ingenuity. However, many of these customers are working on laptops, studying or catching up with friends between appointments—activities that require concentration and, not coincidentally, caffeine. This tendency toward bright-eyed daytime activities begs the question: Even if all the right ingredients are there, do people want to relax at a Starbucks at night, or does the third place lose its appeal once the workday is over?

From the looks of this outlet, the answer to that is complex. Though the outlet was still filled with the standard blend of those typing on laptops, those skimming e-readers or newspapers and those socialising over beverages, an estimated third of the customers were enjoying items from the evening menu rather than standard coffee and baked goods. This suggests that the evening programme may not have the ability to entirely reinvent Starbucks as an evening destination, but rather that the new menu can fit in with existing offerings as a value-added benefit to the brand’s existing consumer base—essentially improving the way customers currently use the brand rather than changing their perception of it entirely.

And in many ways, the addition of beer, wine and small plates does align easily with Starbucks’ traditional third place concept. Starbucks outlets are typically less full during the evening hours, making it easier for customers to dine-in and ensuring that the evening programme has the potential to drive incremental sales rather than cannibalising existing business by clogging seating areas. Furthermore, just as morning dine-in customers are likely looking for invigorating beverages, those in the evening should respond well to being given more options that are conducive to relaxation. In this way, the Evening programme simply extends Starbucks current services: customers are still invited to come in, sit down and relax with a beverage, but now they can choose to do so from a wider variety of options.

This is not to say, however, that the programme will be a guaranteed success. It requires larger outlets with plenty of seating space, and therefore isn’t feasible in small footprint stores or those that serve primarily takeaway traffic. Similarly, location will be very important in determining how it fares at individual outlets. While those located in large cities where consumers have plenty of options for evening dining experiences may have a harder time finding significant traction, outlets in suburban or more residential areas can offer consumers a nearby place to enjoy premium alcoholic beverages and snacks in a flexible environment that is just as easily conducive to casual conversation as it is to individual activities. Most likely, the highest potential for success for the Evening programme lies in the latter category, in locations where Starbucks can leverage existing brand loyalty to encourage its consumers to interact with the brand in a more nuanced way. With this strategy, Starbucks could have the opportunity to increase traffic during a traditionally weak daypart, adding an incremental—if niche—revenue stream to its existing business model and reinforcing its premium brand positioning along the way.

 

 

About Our Research

Request a complimentary demonstration of our award-winning market research today.