Coffee→Food→Alcohol... Why Starbucks' Transformation Is Innocent?

A Drink of 'Stale (Seubeok + Cocktail)' by the Sea

This year marks the 25th anniversary of Starbucks' entry into Korea, and the in-store production and sale of alcohol is a fresh challenge. Starbucks' full-scale entry into alcohol sales is interpreted as a strategy to secure competitiveness with new alcoholic beverage menus in the saturated coffee market and to increase sales during the vulnerable evening hours for coffee shops.

Starbucks Busan 'Haeundae X The Sky' store. [Photo by Starbucks Korea]

According to the National Tax Service's National Tax Statistics Portal on the 9th, as of December last year, the number of coffee shop stores nationwide was 95,801, an increase of 2,732 stores (2.94%) compared to the same month the previous year (93,069 stores). The domestic coffee market size has exceeded 3 trillion won. Market research firm Euromonitor estimated last year that the per capita coffee consumption in Korea was about 405 cups, which is 2.6 times the world average (153 cups).

The growth rate of Starbucks stores is also steep. As of this date, Starbucks stores have exceeded 1,900. At the end of last year, the number of Starbucks stores in Korea was 1,893, ranking fourth in the world after the United States, China, and Japan; two months later, it increased by 8 stores to 1,901 as of today.

Overseas famous brands are also continuously entering the Korean market due to Koreans' love for coffee. Tim Hortons, known as the 'national coffee of Canada,' first entered Seoul's Gangnam-gu Sinnonhyeon Station in December last year and has now opened its 5th store. The 5th store, which opened at the end of last month, is located in Bundang Seohyeon, expanding from Seoul to Gyeonggi Province. Although there was controversy over the price of a medium-sized Americano (M) being 4,000 won, which is more expensive than in Canada, hundreds of people lined up for the opening of the first store, attracting significant attention.

With the expansion of existing brands' stores and the influx of various new overseas brands, the domestic coffee market has long been saturated. Therefore, domestic coffee shop industries, including Starbucks, have started selling not only coffee and beverages but also food items like sandwiches and desserts, and now appear to be expanding into alcoholic beverages such as beer, whiskey, and cocktails.

The coffee industry is also paying attention to the possibility that Starbucks may gradually expand stores selling alcoholic beverages, even if it is impossible to convert all 1,900 nationwide stores into licensed food service establishments and sell alcohol at once. The increasing number of consumers enjoying 'highballs,' whiskey mixed with tonic water, also supports the potential expansion of Starbucks' alcohol business. The Korea Customs Service reported that whiskey import volume increased by 13.1% year-on-year to 30,586 tons last year.

Professor Seo Yong-gu of the Department of Business Administration at Sookmyung Women's University said, "Selling alcohol as part of various efforts to survive in the red ocean of the coffee industry is understandable," and analyzed, "If Starbucks effectively utilizes the sweet aroma of coffee and its sophisticated spatial marketing strategy, it can sufficiently appeal to consumers."

However, since alcohol sales could damage Starbucks' image as a 'premium coffee shop' and place it in competition again with already saturated general restaurants, the industry is closely monitoring Starbucks' in-store alcohol production and sales.

This content was produced with the assistance of AI translation services.