"Hard to Survive"... Coffee Shops Selling Alcohol

Domestic Market Saturation... New Breakthrough
Wine, Beer, etc... Pair Well with Desserts
However, Not All Attempts Are Successful

As the domestic coffee shop market reaches saturation, more establishments are beginning to sell alcoholic beverages such as beer and wine. Alcohol sales can be a clever strategy to boost revenue during the evening hours, which are typically weak for coffee shops. However, while this approach can create new revenue streams, there are concerns that it may cause these shops to lose their identity and face different competition from regular restaurants, so a cautious approach is advised.

According to industry sources on the 4th, Angel-in-us, a coffee shop operated by Lotte GRS, has been selling wine at 12 directly managed stores nationwide since opening its Seoul Seokchon Lake branch in December 2020. Targeting the MZ generation (Millennials + Generation Z), Angel-in-us mainly offers cost-effective products priced around 9,000 KRW. The pairing of wine with their existing bakery items such as sandwiches and desserts has received positive customer feedback.

Wine products are displayed in the showcase at Angel-in-us L7 Hongdae branch in Mapo-gu, Seoul. [Photo by Angel-in-us]

Starbucks Korea began selling beer at its Gyeonggi-do Yeoju Country Club (CC) store on the 15th of last month. This is the first attempt to sell alcoholic beverages at Starbucks stores in Korea. The beer is supplied by Shinsegae Group’s craft beer pub, Devils Door. It is a "coffee beer" made using the "Byeoldabang Blend" coffee beans, sold in a 355ml "Tall" size cup for 12,000 KRW.

The reason Starbucks started selling beer at the Yeoju Jayu CC store is due to the unique environment of this location. This store replaced the "shade house," which used to sell food and alcohol within the golf course. When Starbucks opened, the space where customers used to drink beer disappeared, so beer sales began in response to requests from golf course users.

Starbucks stated that about 30 to 50 cups of this beer are sold daily on average, but they are cautious about expanding beer sales to other stores. A Starbucks representative said, "We will carefully consider any further expansion of beer sales."

However, industry insiders analyze that the Yeoju Jayu CC store serves as a "test bed" for Starbucks’ beer sales. They suggest that beer is first sold at a golf course store where beer consumption is expected to be high, and based on consumer reactions, there may be potential to expand to other specialty locations. In fact, overseas, major city stores in New York, Tokyo, and Shanghai are already selling alcoholic beverages, mainly cocktails.

Not all coffee shops have succeeded in selling alcohol. Hollys Coffee sold wine at 27 stores nationwide, including Seoul Cheonggyecheon, Itaewon, and Busan Dalmaji, starting from late October 2020, but has since discontinued this service.

Professor Seo Yong-gu of the Department of Business Administration at Sookmyung Women’s University said, "The coffee industry must make various efforts to survive in a red ocean market. Alcohol sales are one such method." He added, "Fortunately, alcohol prices have recently decreased, so I suggest approaching consumers through five-sense marketing and emotional differentiation by leveraging the unique aroma and sentiment of coffee."