Driving Profits in the New Economy: Profiting From the Hottest Beverage Trends Presented by Robert...

Driving Profits in the New Economy:

Profiting From the Hottest Beverage Trends

Presented by

Robert Plotkin BarMedia

Sean Ludford

BevX.com

Nightclub & Bar ShowLas Vegas

Tuesday, March 3rd, 200910 a.m. – 11 a.m.

• Knowing what lies just around the corner would make our business less precarious

• Forecasting trends before they hit is like knowing next month’s stock quotes• What mega-trends are affecting the hospitality

industry as a whole?• What spirits are on the rise and which are

cooling off?• How is the recession affecting consumer

spending?• Which cocktails are gaining momentum and

losing steam?

• There were over 945,000 food and beverage establishments in U.S. in 2008

• Every year 55,000 new restaurants open in the U.S.

• On average 133,000,000 Americans frequent restaurants every day

• Restaurant sales have grown from…• $379B in 2000• …to a projected $558.3B in 2008 (+ 47.3%)

Source - National Restaurant Association

Industry Snapshot — By The Numbers

• In 2008, 88% of restaurants in the U.S. were franchises or multi-unit operations

• Compared to 85% of all restaurants independently owned in 1980

• 57% of franchise restaurants fail within 3 years

• 59% of independent restaurants fail within 3 years

Source - National Restaurant Association

Industry Snapshot — Independents vs Franchises

Spirits and Wine Outpace Beer Growth

Industry Snapshot — On-Premise Volume Growth

Spirits Volume + 16% since 2003 (On- & Off-Premise)

Industry Snapshot — Distilled Spirits Volume Trending Up

Vodka, Rum and Tequila Trending Up

Industry Snapshot — Spirits’ Category Volume

2003 vs 2008

Industry Snapshot — Top 10 Selling Spirits Brands

Industry Snapshot — Top 10 Selling Spirits Brands

2003 vs 2008

Industry Snapshot — Top Selling Spirits On-Premise

2003 vs 2008

Industry Snapshot — Top Selling Spirits Regionally

Most Popular On-Premise Spirit Brands by Region, 2008

Industry Snapshot — Bestselling Cocktails On-Premise

Most Popular On-Premise Mixed Drinks, 2008

Industry Snapshot — Bestselling Cocktails On-Premise — Regionally

Most Popular On-Premise Mixed Drinks by Region, 2008

Consumer Research — Next Level Marketing & Nova Marketing Services

• In December 2008, Next Level Marketing and Nova Marketing conducted a research study of 500 on-premise consumers —

• All participants were of legal drinking age

• Split 50% male / 50% female

• Located evenly throughout U.S.

• All had ordered beverage alcohol on-premise past 30 days

Consumer Research — Next Level Marketing & Nova Marketing Services

• Research study gathered on-premise consumer insights into:

• Impact of the economic downturn

• On-premise purchasing habits

• Attitudes regarding drink pricing

• Drink menu effectiveness

• Quantitative findings come with a “confidence level” of 95%

• Next Level Marketing & Nova Marketing allowed us to share the study’s findings

Consumer Research — On-Premise Consumer Insights

Reducing Full-Service Bar or Restaurant Spending —

• Nearly 80% of consumers say they’re going out less often — 25% spending less when they do

Source: Next Level Marketing and Nova Marketing


Ways To Reduce Spending Per Visit —

• Consumers looking to cut back on their spending per visit order less expensive entrees, take advantage of special promotions, cut back on side orders and cocktails


Drinking Behavior Changes —

• When asked how their beverage alcohol purchases have changed over the past year, consumers split evenly between ordering the same and ordering less per occasion



Most Important Beverage Alcohol Items —

• Consumers rate “Everyday Drink Prices At A Good Value” as the most important beverage program element



Importance of Price When Ordering Drinks —

• Price of beer, wine and spirits/drinks is “very important” to 28% of consumers and “somewhat important” to 50%



Knowing Prices in Advance —

• Most consumers don’t know the exact price of beer, wine and cocktails before they place their orders



Drink Taste Expectations – Spirits

• Consumers strongly agree that cocktails made with premium brands taste better than those made with house brands



Drink Taste Expectations — Summary

• Consumers strongly agree that premium beers, wines and spirits taste better than house brands



How Much More Will Premium Cost? —

• On average, consumers expect to pay $1.81 more for premium beer, $2.44 more for premium wine and $2.80 more for a premium cocktail



Responsiveness to Suggestive Selling —

• Half of the consumers responded that they’d probably order a beer, wine or spirit suggested by a bartender/server



Beverage Purchase Decision Timing —

• Nearly 80% of consumers don’t know in advance what beer, wine or spirit/drink they’ll order



Beverage Purchase Influencers —

• Beverage menus and bartender/server suggestions are the most important order influencers



Reading Drink Menus —

• Nearly 90% of consumers read the drink menus at full-service bars and restaurants



Types of Drink Menus —

• Consumers clearly prefer stand-alone drink menus over drink listings in food menus, table tents or insert cards



Number of Offerings on Menus —

• On average, consumers want to see 14 beers, 14 wines and 16 cocktails offered on drink menus



Information on Drink Menus —

• Most consumers want to see drink descriptions on menus



Menu Test #1 - Functional Descriptions Only —

• Based on functional descriptions, 47% of consumers would order House Margarita, 31% Top Shelf Margarita and 22% Ultra-Premium Margarita



Menu Test #2 - Adding Romance Copy —

• Adding romance copy reduces orders of House Margaritas from 47% to 33% and increases orders of Ultra-Premium Margaritas from 53% to 67%



Menu Test Summary —

• Adding romance drink copy to menus drives significant drink trade-up — addition of drink prices has little impact on trade-up



Top 15 Cocktail Flavors




Interest in Emerging Cocktail Flavors



Top 15 Favorite Cocktails



Top 15 Favorite Call Brands


Beverage Information Group

The Beverage Information GroupHandbook Division17 High StreetNorwalk, CT 06851203.855.8499

Eric SchmidtManager of Information [email protected]

Publishers of:

Presented by

Robert Plotkin BarMedia

[email protected]

Sean LudfordBevX.com

[email protected]

Driving Profits in the New Economy:

Profiting From the Hottest Beverage Trends

Driving Profits in the New Economy: Profiting From the Hottest Beverage Trends Presented by Robert...

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