Alcoholic beverages continue to lag total food and beverage growth in the on-premise channel, according to a new study from Technomic entitled On-premise Intelligence. Total on-premise alcohol dollars ended 2018 with a slightly faster rate of increase than in previous years (2.5%), outpacing the expansion trend at retail (1.9%). However, alcohol sales growth lags the total food and beverage sales growth trend in on-premise (4.1%)
That makes identifying growth brands, categories and subsegments a key challenge for both on-premise operators and for bev/al marketers. Also key, the study says, is targeting key consumer groups and occasions. While traditional casual-dining restaurants continue to struggle with growing traffic and sales, consumers are increasing their visits to recreation locations such as casinos, bowling alleys and concessions, and prioritize alcohol beverages for those occasions.
Another challenge: Margaritas face stiff competition for drink menu space from restaurant originals and unique specialty drinks. The Margarita remains the cocktail with the largest share of menu at leading restaurants, however, signature or specialty cocktails continue to rank among the top 10 fastest-growing cocktails in in terms of menu space, and have, as a group, edged out margarita in terms of overall share of menu. Margarita’s presence on menus is not growing notably. This points to both consumers and operators looking beyond this classic for interesting drinks in the on-premise.
Italian wine varietals are among the fastest-growing red wines on restaurant menus last year. Also gaining menu placement: Prosecco. While imported table wine overall continues to experience volume declines on-premise, Italian varietals including Barolo, Barbera and Amarone are gaining menu space. Likewise, Prosecco has increased its visibility on menus and now holds 19% share of sparkling wine offerings menued at leading restaurants.
The final trend is that consumers’ knowledge of drink selections and quality is growing. And so are their expectations of bartenders’ expertise. This makes providing bartenders with product information even more critical.
The growing availability of resources and information through various platforms (e.g., social media, supplier websites, etc.) is driving consumer beverage knowledge, as are increased visits to recreation and alternative establishments such as breweries, tasting rooms and events that provide additional exposure to beer styles, wine varietals and spirits selections and adult beverage experiences.
More than half of consumers confirm the importance of servers/bartenders who are well-versed in spirits, wine and beer in restaurants and bars. This raises the bar on the need for bartender and server training and education.
The report was developed with Beverage Marketing Corp.