Starbucks Bringing Beer and Wine to Chicago

January 12, 2012


Starbucks bringing beer and wine to Chicago

Starbucks Coffee Co. plans to open as many as seven stores that sell beer and wine in the Chicago area by the end of 2012.

The Seattle-based coffee giant has been testing a more community-oriented store concept to boost traffic in the evening for more than two years. These stores offer savory, high-quality, small-plate options like cured meats, and beer and wine, in addition to the usual coffee and tea. Starbucks has also been experimenting with live entertainment, including music, poetry readings or theater, depending on the neighborhood.

“We’re really trying to expand the evening daypart,” said Starbucks spokesman Alan Hilowitz. “Customers have told us they want to be able to come in and have coffee, or a glass of wine.” At the six stores currently open in the Seattle area and Portland, he said, same-store sales after 4:00 p.m. have increased by double-digit percentages.

Hilowitz declined to provide Starbucks’ investment relating to the stores, adding that some will be in new locations, and others in existing locations that will be remodeled. Specific locations have yet to be finalized as the company is working with local officials to obtain the proper licenses and permits.

Darren Tristano, executive vice president of Technomic, said the move makes sense given the cafe environment, adding that Burger King is also experimenting with beer service at its Whopper Bar chain.

“Higher price points can be more profitable, but permitting could be more of an issue and a really important factor will be how guests who consume adult beverages interact with guests who don’t,” he said.

Morningstar analyst R.J. Hottovy said that the concept has tested well enough in Seattle to warrant expansion, and Chicago has often served as a proving ground for Starbucks. It was the second U.S. city after Seattle to host its cafes.

The concept, he said, gives Starbucks access to new customers, particularly “the kind of customer who isn’t a coffee drinker.”

Starbucks is committed to expanding its local store base and remodeling stores, Hilowitz said. During the fiscal year ended in October, the chain remodeled 40 area stores. By October 2012, Starbucks plans to open six to 10 new stores and remodel another 100. Each remodel employs 30 to 50 construction workers and new stores represent about 15 jobs apiece, he said. Starbucks employs about 5,000 people in the Chicago area, he said.

View the full article on The Chicago Tribune

Self-Serve Frozen Yogurt Gaining Fans

January 12, 2012


Self-serve frozen yogurt gaining fans

New Jersey entrepreneurs have developed an appetite for the hottest trend in frozen yogurt: self-serve yogurt shops.

At Frozen Peaks self-serve yogurt in Bergen Town Center in Paramus, owner Jay Mena and store manager Kaleena Garza sample the flavors they offer. Customers are given a choice of toppings to sprinkle on their health-oriented desserts. At least a dozen self-serve frozen yogurt stores have opened in Bergen and Passaic counties over the past two years, with an equal number in the planning stages. Businessmen who have invested in the trend say it is an enterprise with relatively low overhead and labor costs, with the potential for high-volume sales.

“There are very limited barriers to entry for this type of a market and there’s a lot of interest, from franchising to independent operators, to people who are just saying this is a great building business and I think I can make money because the economics are very good,” says Darren Tristano, executive vice president of the Chicago-based food industry consulting and research firm Technomic.

Growing market
Total frozen yogurt sales — self serve and full service — will top $723 million this year.

Yogurt sales have grown an average of 5.9 percent a year between 2006 and 2011.

Sales are projected to grow an average of 2.4 percent a year between 2011 and 2016.

There are 1,180 frozen yogurt stores in the United States.

The self-serve share of the frozen yogurt market has grown to 20.7 percent in 2011, from 3 percent in 2006.

Source: IBISWorld Industry Report: Frozen Yogurt Stores

“It’s a very good model not just for an operator, but the price point is very good for today’s consumer who wants value and is looking for this fresh style of healthy-perceived frozen yogurt.”

Consumer favorite

Last week, customers began lining up to serve themselves the 24 flavors offered at North Jersey’s newest entrant in the frozen self-serve arena, Frozen Peaks, at Bergen Town Center in Paramus.

“This summer you’ll see an abundance of these stores opening up, because over the last year people have started to see that there’s a lot more to this than just a frozen treat, because of the self-serve aspect,” says Jay Mena, who founded Frozen Peaks with four partners. The partners opened their first two Frozen Peaks in November, at Willowbrook Mall in Wayne and at Monmouth Mall in Eatontown, and plan to open a fourth store in Ledgewood early next year.

Is-a-berry in Englewood and Cups in Clifton were among the first self-serve vendors to appear on the scene in North Jersey, followed by Yo Boy in Teaneck, Swirls in River Vale, BBerries in Totowa, and others.

Eric Casaburi, the founder of New Jersey-based gym chain Retro Fitness, has opened his first self-serve shop, Let’s Yo Yogurt, in Marlboro and plans to expand rapidly throughout the state.

Frozen Peaks, like a number of the other self-serve stores, sells YoCream frozen yogurt, considered the premium brand on the market.

“It really is great yogurt,” says Frank Ranu of Clifton, who has reviewed most of the North Jersey yogurt places for his blog,

“Cups [in Clifton] was one of the first in the area to have YoCream,” he says. The key question for the new chains, he says, will be “What are these places going to do to differentiate themselves?”

The frozen dessert category — which includes frozen yogurt, frozen drinks, and ice cream — is a $7.1 billion market, says Tristano. Frozen yogurt sales make up only 10 percent to 14 percent of that market, he adds.

Self-serve, Mena says, is catching on like wildfire because customers like being able to mix flavors and control how many toppings they load onto their frozen treats. Children in particular like the concept. “Kids are drawn to it like you wouldn’t believe,” he says.

Letting customers serve themselves not only keeps labor costs low, but solves a key food service problem, Mena says.

“I’ve owned food establishments before, and the biggest complaint you get from customers is being served something that they didn’t like — too little, too much, not enough of this,” he says.

“Here you have a situation where the customer is serving themselves, so they are doing exactly what they want. They are 100 percent in control. There are no unhappy customers because they didn’t get the right mix.”

Mena, who works in direct-mail marketing and owns a liquor store and bar in Blairstown, says he also was attracted to the frozen yogurt business because he “fell in love with the product.”

“It’s a healthy product,” he says. “It’s probiotic. You get calcium, you get protein, the whole nine yards.” To stand out from the crowd, his stores added a feature that allows customers to put a base layer of crunch cereal or cookie crumbs in their cup before adding yogurt and other toppings. The store sells kosher yogurts and is expecting to receive full kosher certification.

View the full article on NorthJersey