Starbucks Doubles down on Draft Coffee, Target Targets Craft Beer

The Reserve Nitro Cold Brew (image courtesy of Starbucks)

Item: Seattle-based coffee giant Starbucks will bring on-tap coffee dispensed from kegs to more than 1,400 U.S. locations by the end of the year, according to Bloomberg.

Any coffee hound can tell you: cold brew has become the latest “must-have,” especially in the warmer months. Other chains, including pioneer La Colombe, have pushed the trend hard. Two years ago, La Colombe introduced canned cold brew lattes as well, taking the nitrogen-pressurized can method popularized 20-plus years ago by Guinness and other brewers into the coffee realm.

This is another way the average bar and restaurant is being challenged to step up their non-alcohol game. Otherwise, they risk losing the incremental income provided by coffee and tea. Starbucks is increasing the locations for the foamy cold coffee after the product generated high demand from customers.

"It creates a whole new experience for our customers," said Sandy Stark, senior VP of US beverage and global innovation. "The opportunity is massive. Our plan is to be in as many stores as we possibly can."

The on-tap drinks are in conjunction with Starbucks' broader push into chilled coffee beverages. Since Starbucks introduced cold-brew coffee nationwide in the summer of 2015, sales have increased 25% annually.


Item: With craft beer sales one of the few bright spots at Target, the retailer plans to expand its alcohol selections at 300 stores nationwide.

Chief merchandising officer Mark Tritton said the move to beef up its beer, wine and spirits offerings was prompted after the retailer reported “mid-single-digit” sales increases in its adult beverage business for the first quarter.

Target said the expansion includes adding alcohol in “300 stores through increased footprints, remodels and new liquor licenses.”

“We continue to focus on developing localized assortments and more compelling displays, and our guests are really responding,” Tritton said during a recent conference call with investors.

It’s yet another sign that operators need to be careful not to treat craft beer the way they once did the major American brews, i.e., carrying only the most popular brands. If a beer can be found at mass market vendors like Target, it won’t be considered something special when customers see a beer on your menu they just got a deal on at their favorite retailer. A mix of those brands and more sought-after brews may be the right formula today.


Item: The Tipsy Robot boasts two robotic bartenders.

Owner and robotics company owner Rino Armeni opened the 2,500-square-foot bar at the Miracle Mile Shops at Planet Hollywood. Customers place their orders on a tablet station in the bar or through an app on their smartphone. They pay with cash or credit card and receive a barcode in their email, which is then scanned. Once the barcode is scanned, the drink is entered into the system. Patrons can see where their drink is in the queue and are alerted when their order is up. Each robot has access to more than 60 spirits, and drinks can be mixed and poured into a 12-ounce plastic cup within 70 seconds.

“This is the most high-tech bar in the world, as the robot can perform the duties of the bartender,” Armeni said. “It’s not just a bar – it’s also an attraction and entertainment. They work to perfection, so everything the robots make is perfect,” he said.

Even spirit companies occasionally show interest in the idea that the human bartender can be eliminated and is somehow getting in the way between the customer and the business owner. It’s backwards thinking, and let’s hope that in this case, what they say is true: “What happens in Vegas, stays in Vegas.”

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