The CB Elevator Pitch: Why booze makes sense at Starbucks

Finding new business in under-exploited pockets of the day is a classic restaurant strategy

 

In this edition of the CB Elevator Pitch, editor James Cowan explains why ubiquitous coffee chain Starbucks’ plan to introduce beer and wine after 4 P.M. at many Canadian locations isn’t such a strange idea. As Cowan himself recently wrote of McDonald’s, finding ways to boost business in traditionally slow parts of the day is a classic move for quick-serve restaurants:

“We just weren’t listening to our customers,” Betts tells the assembled students, many juggling McCafé cups with their notebooks. “Keeping an established brand refreshed is always a challenging task, but it’s achievable when you stay relevant to customers and connect with them in meaningful ways.”

The most meaningful way to connect with diners in this country? Coffee. On any given day, almost half the population visits a restaurant, according to the NPD Group, a market research firm. The No. 1 item is coffee, with two billion cups consumed every year. Yet McDonald’s share of the market was “tiny” before Betts arrived, according to Robert Carter, NPD’s executive director of food service. “What McDonald’s did was make a strategic decision to focus on that core item,” says Carter. “It was a way to really connect—it gave Canadians a reason to visit.”

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