Much ado was made last year about Seattle-based Starbucks taking a number of steps to modify its brand, perhaps most notably by serving wine and beer at test stores. While numerous articles indicated that the test stores in Seattle would focus on selling “local” or “regional” wines, Starbucks instead seems to have focused on selling high production wines made by large producers from around the world.
The Olive Way Starbucks on Capitol Hill is the first store with the company’s name on it to begin selling wine and beer (several other stores that did not bear the corporate name had done so previously). The store, which opened in October, was also substantially redesigned into what USA Today described as a “prototype for the next generation.”
Many of the changes introduced at the store were said to be intended to recapture the feel of a local neighborhood café rather than an international megacompany. From the looks of the wine list, the company is off to a bad start.
The Starbucks wine menu is, understandably, limited with four reds and three whites. The list shows some variety. For example, reds include a Pinot Noir, Malbec, Cabernet, and Red Blend.
In terms of focus, Pacific Northwest wines account for three of the seven wines on the menu, all of which are from Ste. Michelle Wine Estates. This seems a far cry from what the Associated Press originally described as a list intended to be composed of “wine from the Pacific Northwest’s vineyards” and what MSNBC described as “regional wines.”
Perhaps not shockingly, given that Starbucks clearly aims to take this program nationwide if it is successful, the wines are also all high production offerings as indicated below.
Reds
Erath Pinot Noir Oregon – 104,000 cases
Alamos Malbec Argentina – 100,000 cases
14 Hands Hot to Trot Washington – 60,000 cases
Louis M. Martini Cabernet California – 205,000 cases
Whites
Maso Canili Pinot Gris Italy – 20,000 cases
Chateau Ste Michelle Riesling Washington – 647,275 cases
William Hill Chardonnay Napa Valley California – Unknown
Now I have nothing against high production wines, and some of these wines, such as the Chateau Ste. Michelle Riesling, are undeniably superb values. I also believe that the Washington wine industry could see some benefit from having Starbucks place Ste. Michelle Wine Estates’ wines in its stores nationwide.
However, for a store supposedly looking to recapture a local feel, doesn’t offering high production wines from large producers from around the world seem a little contrary? These are wines consumers could generally find just about anywhere in the country on any retail shelf. They seem to reflect corporate sensitivities rather than displaying any local or regional sensibility.
In terms of the prices, the glass pours are generally reasonable. On bottles, Starbucks has taken a page from the restaurant world with generous markups. For example, the 14 Hands Hot to Trot, which has a retail price of $12, is $29 a bottle (glass price $8). The intent seems to be that Starbucks wants people to come in for a glass of wine but doesn’t want people coming in to share a bottle – or worse, drink a bottle by themselves. In this way, the company seems to be sticking its toe in the water of alcohol sales rather than jumping in (Note: alcohol sales begin after 4pm).
I don’t expect the Olive Way Starbucks – or its stores nationwide – to be stocked with high priced, micro-production wines from local producers. Clearly if the company looked for Washington wines that it can pour by the glass for under $10 and still cover the wholesale cost of the bottle (which is what it appears to have done in its global wine selections), its options are limited. Still, there seems something a little sad about Starbucks making its first foray into the world of wine with high production wines that could be found anywhere. This seems especially true given that the test store is located in the company’s home city in the nation’s second largest wine producing state. If Starbucks is really loooking to alter its image and recapture a local feel, time for take two on the wine list.
"the nation’s second largest wine producing state"? Yes, and LA the nation's second largest city, but it still has half the population of NY. That is why CA wine will always dominate wine lists. SB's is no different than any other chain. Would anyone complain if the Applebee's in Santa Rosa didn't have a huge selction of "Local" wines? If this is successful, SB will NEED those high case counts to supply all of its stores. I would rather they rotate the winelist weekly/monthly like their fetured coffee, than have a large, and stale list on a regular basis.
I agree Sean. This is a missed opportunity for Starbucks.
While not really surprised by this development, I agree with Anon's suggestion for rotating lists. However, when looking at this from the perspective of a corporate logistics exercise, what they have done makes the most sense from a supply/availability and personnel – no requirements for high priced wine experts on a regional basis. Managers of local stores will just log into the corporate ordering system and have their wine and beer stock filled by the same team that delivers the balance of the store's stock.
Anon, I don't have any issue with wines from California or elsewhere dominating the Starbucks list. However, I do think it is a little disingenuous that the company pushed the "local" and "regional" wines angle in the media when the store was originally opened. As a consumer, as well as a writer who is on the receiving end of press releases, this bothers me. It made for a good story at the time but it doesn't appear to be the approach the company took. I believe Starbucks is/will be offering a limited number of rotating wines as well.
Terry, definitely makes a lot of sense from the perspective of taking the program nationally. You could put these wines in any store in the country and they will succeed, assuming people want to drink wine at Starbucks. Especially given that this is a test store, I wish they could have played with some additional offerings recognizing Washington's place in the wine industry. Seems a shame to not have a local company doing more to support a local industry.
Sean, I think Terry really nailed the issue here. There is no way SBUX could open hundreds — potentially thousands — of stores with wines that were selected from local or regional wineries surrounding each location. Aside from the slim pickings the Omaha stores would have, it would be logistically impossible to deal with that many unique vendors. It's simply the "real world" imposing its will on a fantasy scenario. Personally, I would love to see more NW wines on the Olive Way list, but they are probably testing a list that can be used on a broader scale. At least three of the seven are excellent examples of local/regional wines. (Just because the production is larger than average doesn't change the fact that they are indeed locally/regionally made.) If they stick with those wines on a national basis, that would be a far greater representation of NW wines than most other major restaurant companies offer. Final thought on pricing — I think they are being very fair relative to most restaurants, including the bottle cost. They are pouring a generous six ounces per glass, so a bottle is still cheaper than four glasses.
Option: Starbucks Private Label
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