tag:blogger.com,1999:blog-1080161909822087430.post5776964849766125329..comments2024-03-02T00:28:05.502-05:00Comments on Wine -- Mise en abyme: Potential impact of Starbucks entry into the wine marketwineORLhttp://www.blogger.com/profile/06163150468541915038noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-1080161909822087430.post-8587254547777978042010-08-18T20:06:07.373-04:002010-08-18T20:06:07.373-04:00Even though Starbucks may potentially use widely a...Even though Starbucks may potentially use widely available wines, those wines may be private-labeled and, with Starbucks' buying power, will have been procured at prices below the prices available to the regular retailer. This would give Starbucks pricing flexibility. The question then becomes whether Starbucks uses that advantage for profit or for predation. Further, Starbucks has non-wine products in the store which can be brought to bear in a whole-store pricing strategy that accords even greater pricing flexibility re wines. The market will be positively impacted by Starbucks presence -- total sales will increase because of its number of outlets and new customers -- and if the pricing differentials are not vast, people introduced to wine in Starbucks are potential customers for all players. My concern is that the market is not growing at a rapid enough rate to absorb a huge new player like Starbucks while continuing to support existing players at similar or increased rates of growth.wineORLhttps://www.blogger.com/profile/06163150468541915038noreply@blogger.comtag:blogger.com,1999:blog-1080161909822087430.post-37166302247303354912010-08-18T14:36:33.752-04:002010-08-18T14:36:33.752-04:00Since it's likely that SBUX will be using wide...Since it's likely that SBUX will be using widely available wines, it's unlikely they will be able to price them competitively for retail sales. So even if they did decide, down the road, to offer them for take-home, I really doubt they'd put a dent in the retail wine market. I see nothing but a potentially positive outcome for the Orlando wine market if they proceed here.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1080161909822087430.post-87831793914595536962010-08-18T13:46:18.697-04:002010-08-18T13:46:18.697-04:00Thanks for the comment. My last sentence gave an ...Thanks for the comment. My last sentence gave an erroneous impression as the market under consideration is the on-premise/wine-bar space. Towards that end, I only intervieweed players in that space. I agree with your comment regarding the need for Starbucks to work with large wineries but feel that the opportunity is too large, and the wall-street penalty too large, for this to be a cursory pass at the market on thier part. I have no idea when the concept will be introduced into the Orlando area but given the fact that we get visitors from all around the country, there would seem to be some benefits to having one or two early stores here. In addition to a passion for wine, Starbucks will also have to bring some cred to the table and that may point to wine people being brought in to the address the issue that you raise. <br /><br />Given the fact that Starbucks did sell coffee for home consumption in their stores, I am not sure what would prevent them from some time in the future seeking to enhance their revenue stream from the venture by selling wines from a web site or at the stores.<br /><br />Again, thanks for the comment.wineORLhttps://www.blogger.com/profile/06163150468541915038noreply@blogger.comtag:blogger.com,1999:blog-1080161909822087430.post-58437428322796175802010-08-17T17:30:49.853-04:002010-08-17T17:30:49.853-04:00Well, you had one interviewee that got it right. ...Well, you had one interviewee that got it right. This will be a positive thing for area wine retailers because SBUX isn't going to retail any wine -- just sell it by the glass and possibly by the bottle for on-premise only consumption. It will most likely expand the base of wine consumers in the Orlando area, benefitting local retailers. Regarding "locking up the product stream of some boutique wineries" -- it ain't going to happen. SBUX is going to need to work with large wine companies in order to maintain control of the selections (they're going to want a fairly homogenous offering around the country), and ensure a reliable channel of distribution. I doubt SBUX will ever have the passion for wine that they have for coffee -- they are merely trying to bolster a weak daypart in their current business model. All this said, I'll bet it's at least a year or two before we even see the first SBUX in Orlando offer wine, if ever. They are very, very early in testing.Anonymousnoreply@blogger.com