Why sell beer at a coffeehouse or a wine milkshake (yes, that is a thing now) at a burger joint? The answer is exactly what you might think: money. But there’s a little more to it than that.
Starbucks is going to be bringing wine and beer to thousands of stores in the near future. The mega-chain already offers these drinks at a handful of locations across the country, and the company says it has found success in urban areas near other places where people might be out at night, such as restaurants and theaters.
“As we bring the evening program to stores, there’s a meaningful increase in sales during that time of the day,” Chief Operating Officer Troy Alstead told Bloomberg.
It’s the “time of the day” aspect that is crucial to this. Starbucks, as part of its stated plan to become the “Third Place” for people (after your home and your office), wants to reach consumers who won’t want to finish a long day of work and sit down with a latte. So they’re going after an audience that wants a glass of wine and an artichoke and goat cheese flatbread.
In addition to drawing in people to spend money on a different menu, Starbucks is also selling something that comes with different costs attached. The chain is facing higher costs for milk and coffee, but the company doesn’t want to raise prices. Alcoholic beverages, though, are quite profitable for restaurants. Starbucks doesn’t list the prices for wine or beer online, but this review from the Los Angeles area last year said glasses of wine cost between $6 and $15, while beer cost $4 or $5.
Plenty of fast-food (or, if you prefer, good food available quickly) chains offer booze nowadays. Sbarro, Steak ‘n Shake, Chipotle, Moe’s, Baja Fresh and Qdoba all offer beer. Burger King and Sonic followed suit a few years back. (There are other issues for these chains that accompany the booze, though, including laws that govern the ages of people serving alcohol.)
Red Robin, the burger chain, sells beer and wine — and it plans to add a wine milkshake to its menu this spring. They’ve already been selling beer shakes, including one made with Blue Moon. The wine milkshake will taste a little sweeter:
The $1 billion burger joint is calling the beverage the “Mango Moscato Wine Shake.” Made with vanilla soft serve, moscato-flavored vodka, and moscato wine, the shake is “definitely sweet,” says Red Robin’s master mixologist Donna Ruch. Retailing for $7.49, the drink will set you back about $3 more than Red Robin’s typical draft beer or glass of wine.
Emphasis added. Obviously the extra money is part of the allure for a company looking to make money. Yet there’s another reason for offering something like a mango and wine milkshake: helping a company stand out in a pretty crowded marketplace. “We can all carry craft beers and make great food, but it’s those little things that could make the difference in someone coming back or not,” Denny Marie Post, senior vice president and chief marketing officer of Red Robin, told Fortune.
Look at it this way: If the idea of a wine or beer milkshake grosses you out, you’re just not going to order it. But if you do try it and love it, Red Robin has something you can’t exactly get at every other burger joint on the block. Unless the wine milkshake is a huge hit and the competition starts following suit, of course.