Full of beans?

Could the next challenge for pubs come from competition posed by lifestyle cafés? Adam Withrington probes whether coffee chains will start selling alcohol in pursuit of the continental café society model

Continental café culture. That's what we need in the UK, according to the government. It's the phrase constantly bandied about as the gold standard that licensees need to attain if we are to stamp out irresponsible drinking.

When the subject is analysed, the talk is of the need to bring the continental café culture into pubs.

What isn't considered at all is how other high-street outlets which already have this culture, such as coffee shops, could well opt to include drinks on their menus. In other words, if Mohammed won't go to the mountain, then the mountain must come to Mohammed.

A fanciful idea? Well there is a growing belief that with the new Licensing Act fixing attention on licence applications, these venues might well apply for licences to sell alcohol. And this could be a big threat to high-street pubs. Let's look at the facts. When on holiday in Europe, British tourists absolutely lap up the idea of being able to go into a café and get a beer or a glass of wine. So it stands to reason that they would love to experience the same back at home.

Surely if the head honcho at Costa or Starbucks ever decided to apply for licences for some of their more select outlets they could have a hit on their hands?

The idea of alcohol being sold in coffee shops is not a new one. Costa coffee venues, such as in Brindley Place, Birmingham, have sold a limited selection of beers and wines in the past.

And there are three EAT outlets, all in Lon-don (at the Royal Festival Hall, Oxo Tower and Riverside on the South Bank if you're interested) that currently stock alcohol.

This trend has slowed down in recent years but it is something that could catch on again in the future - for two reasons. Firstly, a growing consumer appetite for this kind of venue (following increased travel to Europe and exposure to the continental café culture) and secondly, the evolving nature of retailing.

Colin Pedrick, president of Interbrew UK, explains: "The nature of retailing is changing and the traditional demarcation areas between different types of retailers are becoming more and more blurred. Retailers are continually encroaching on what is seen as each others' territory and this will continue to accelerate as retailing becomes ever-more competitive. Selling beer through different types of outlets is just one small part of a much bigger picture."

Could selling alcohol work in coffee chains?​

• YES​, says Alistair Darby, managing director of W&DB Brands. "A high-street coffee shop that sells beer and wine? For many people that is a pretty attractive offer. Coffee shops just have the right atmosphere."

He feels high street pubs will suffer if they do not meet this challenge head on. "Once high-street venues such as coffee shops get licences to sell bottled lager and wine I think town centre pubs and bars are going to find life very tough.

"Cafés are very open places - people can see what is going on, especially from the outside. Pubs are not like that. A lot of consumers just see pubs as a risk."

Mr Pedrick at Interbrew UK believes his company's brands would be an ideal fit. "The combination of the brands in our portfolio make them ideal for breaking ground in new retail environments for beer," he says.

"Our range of speciality beers such as Leffe, Hoegaarden and Belle-Vue are sold in 33cl and 37.5cl bottles - ideal for outlets such as cafés where it is more appropriate to offer a smaller measure of beer."

NO​, says Jason Danciger, director of purchasing and catering at the SFI Group. He believes British consumers are too set in their ways to make it work.

"I don't think this is going to be a problem for pubs. People are very rigid in their approach to eating and drinking. We have done consumer research which shows that people have a certain mental image of a coffee shop - a relaxing place where you can sit down and read the paper.

"It is not an atmosphere they imagine having a 'drink' in. People are very set in their ways and changing this mindset is very difficult."

Licensing reform​

So, are the major high street coffee chains actually applying for new licences under the terms of the Licensing Act 2003? I rang up three of the most famous and their replies were fairly similar:

• Café Nero: no plans to apply for licences
• Costa: no plans
• Starbucks: no outlets currently do it and no future plans.

Mr Danciger is not surprised by these responses and says he simply does not believe that the big coffee chains would be interested in changing their offer.

"Building up brand identity is very difficult and can take years, so it would be strange to suddenly change the offer and introduce alcohol - particularly on the high street which is already such a competitive place," he argues.

Ostrich mentality​

Mr Darby, however, believes that ignoring the threat is akin to burying your head in the sand. "That is ostrich mentality. The danger with that argument is that while people may not want coffee in pubs, they may find they would like a beer or glass of wine in a coffee shop."

Jonathan Cooper, managing director of Café Amano in London (see below)​ says offering alcohol in coffee shops makes sense.

"There is a very sound commercial logic to that idea. Look at the market at the moment - everyone is encroaching on each others' territory at the moment. Sandwich bars are doing good coffee, pubs are doing increasing amounts of top-class food and restaurants are improving their drinks offer."

As far as Mr Pedrick is concerned, the new licensing legislation is an opportunity for alcohol to be sold in a wider variety of venues, thus allowing us to treat it more responsibly.

"What we would like to see is that the person who chooses to go to the cinema, a burger bar or a café has the option of drinking, say, a Stella Artois or a Leffe when they are there, in the same way that they can order a coffee in many pubs," he says.

"We're advocating a more continental and sociable approach to drinking alcohol. It's the norm to be able to order a beer alongside a coffee in a café throughout Europe."

However, Mr Cooper does sound a note of caution. He believes that this kind of proposition will only work in the right type of outlet. "It's probably a bit ahead of times to expect coffee chains to change their offer straight away. And I think it will only work in venues with the right location - it is not an offer that will suit every outlet. But if you get it right it will work."

You may take one look at the results of my brief straw poll of three of the biggest high street coffee chains and think there is no apparent threat. But nothing stands still for very long in the world of high- street retail.

And with the likes of Interbrew UK espousing the virtues of selling their products across the high street, you can bet they have already been looking into getting their products into cinemas, fast food restaurants and of course coffee shops.

It is important for publicans to recognise that this is a live issue. If you keep ahead of the game then not only will you head off any threat but your pub offer will be much better for it.

Perhaps Mr Cooper puts it best: "What all sectors in the high-street market have to understand is there is a real middle ground that no one is taking advantage of. You should not close your eyes to the fact that there are big changes going on in the marketplace."