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
Consumer Research — On-Premise Consumer Insights
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
Source: Next Level Marketing and Nova Marketing
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
Source: Next Level Marketing and Nova Marketing
Consumer Research — On-Premise Consumer Insights
Most Important Beverage Alcohol Items —
• Consumers rate “Everyday Drink Prices At A Good Value” as the most important beverage program element
Source: Next Level Marketing and Nova Marketing
Consumer Research — On-Premise Consumer Insights
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%
Source: Next Level Marketing and Nova Marketing
Consumer Research — On-Premise Consumer Insights
Knowing Prices in Advance —
• Most consumers don’t know the exact price of beer, wine and cocktails before they place their orders
Source: Next Level Marketing and Nova Marketing
Consumer Research — On-Premise Consumer Insights
Drink Taste Expectations – Spirits
• Consumers strongly agree that cocktails made with premium brands taste better than those made with house brands
Source: Next Level Marketing and Nova Marketing
Consumer Research — On-Premise Consumer Insights
Drink Taste Expectations — Summary
• Consumers strongly agree that premium beers, wines and spirits taste better than house brands
Source: Next Level Marketing and Nova Marketing
Consumer Research — On-Premise Consumer Insights
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
Source: Next Level Marketing and Nova Marketing
Consumer Research — On-Premise Consumer Insights
Responsiveness to Suggestive Selling —
• Half of the consumers responded that they’d probably order a beer, wine or spirit suggested by a bartender/server
Source: Next Level Marketing and Nova Marketing
Consumer Research — On-Premise Consumer Insights
Beverage Purchase Decision Timing —
• Nearly 80% of consumers don’t know in advance what beer, wine or spirit/drink they’ll order
Source: Next Level Marketing and Nova Marketing
Consumer Research — On-Premise Consumer Insights
Beverage Purchase Influencers —
• Beverage menus and bartender/server suggestions are the most important order influencers
Source: Next Level Marketing and Nova Marketing
Consumer Research — On-Premise Consumer Insights
Reading Drink Menus —
• Nearly 90% of consumers read the drink menus at full-service bars and restaurants
Source: Next Level Marketing and Nova Marketing
Consumer Research — On-Premise Consumer Insights
Types of Drink Menus —
• Consumers clearly prefer stand-alone drink menus over drink listings in food menus, table tents or insert cards
Source: Next Level Marketing and Nova Marketing
Consumer Research — On-Premise Consumer Insights
Number of Offerings on Menus —
• On average, consumers want to see 14 beers, 14 wines and 16 cocktails offered on drink menus
Source: Next Level Marketing and Nova Marketing
Consumer Research — On-Premise Consumer Insights
Information on Drink Menus —
• Most consumers want to see drink descriptions on menus
Source: Next Level Marketing and Nova Marketing
Consumer Research — On-Premise Consumer Insights
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
Source: Next Level Marketing and Nova Marketing
Consumer Research — On-Premise Consumer Insights
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%
Source: Next Level Marketing and Nova Marketing
Consumer Research — On-Premise Consumer Insights
Menu Test Summary —
• Adding romance drink copy to menus drives significant drink trade-up — addition of drink prices has little impact on trade-up
Source: Next Level Marketing and Nova Marketing
Consumer Research — On-Premise Consumer Insights
Top 15 Cocktail Flavors
Source: Next Level Marketing and Nova Marketing
Consumer Research — On-Premise Consumer Insights
Consumer Research — On-Premise Consumer Insights
Interest in Emerging Cocktail Flavors
Source: Next Level Marketing and Nova Marketing
Consumer Research — On-Premise Consumer Insights
Top 15 Favorite Cocktails
Source: Next Level Marketing and Nova Marketing
Consumer Research — On-Premise Consumer Insights
Top 15 Favorite Call Brands
Source: Next Level Marketing and Nova Marketing
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
Sean LudfordBevX.com
Driving Profits in the New Economy:
Profiting From the Hottest Beverage Trends