Restaurant Alcohol Sales Decline

restaurant alcohol sales declineDespite a harsh winter and less-than-stellar economic news (both reasons to drink), restaurant alcohol sales declined in 2013. This consumer soft spot is affecting restaurants, bars, and pubs to a greater extent than the retail arena, although off-premise sales also declined.

Technomic, a leading research consultant for the food service industry, reported these trends in its Special Trends in Adult Beverage Report: 2014 State of the Industry.

According to the Technomic report, on-premise alcohol sales fell 1.3 percent and off-premise sales saw a decline of about half that, recording a .7 percent decline in volume. Additionally, the harsh winter conditions created an overall food service decline of 3 to 4 percent across the country with the most hard-hit areas, including the Northeast and Mid-Atlantic, recording declines ranging from 7 to 8 percent.

David Henkes, Technomic Vice President, said, “Consumers pulled back on drink occasions at restaurants and bars. Wine and spirits were essentially flat on-premise, while beer declined. That said, there were categories and segments that did well on-premise, thanks to creative presentations and programs, and on-trend flavors and formats. Restaurant and bar operators have opportunities to position spirits, wine and beer offerings as a point of differentiation and grow sales going forward.” (Quoted in Technomic’s press release, “Drink Sales Slowing in Restaurants and Bars, Finds Technomic.”)

Creative Ways to Increase Alcohol Sales

Tapping into Henkes’ contention that restaurateurs and pub owners have to differentiate alcoholic drink offerings in order to combat the sales slump and projection that on-premise sales in 2014 will remain challenged, Red Robin recently introduced the wine shake. The Mango Moscato Wine Shake, concocted from wine, vodka, mango puree, and vanilla soft serve is now available at its locations. Plus, more flavors will roll out in the future.

New England Consulting Group CEO, Gary Stibel (quoted in USA Today’sThe latest boozy milkshake: Wine shakes”) suggests that the wine shake introduction is mostly for show and to create fodder for social media. Despite push back from alcohol beverage watchdog groups, the restaurant chain contends it’s not a big party restaurant and that, like other alcoholic offerings, consumers must be 21 or older and will be carded. Red Robin doesn’t anticipate that it will be a great seller but that wine shakes will have fans. Included in that group is Stibel who described the drink as “outrageously good.”

Alcohol Growth for 2014

“Although overall adult beverage volume will be challenged this year, we expect dollar growth from the ongoing consumer shift to more expensive categories, such as high-end whiskey and craft beer,” said Eric Schmidt, Technomic Research Director. He anticipates the areas of growth to also include domestic table wine.

“These adult beverage categories, driven by unique and often food-friendly flavor profiles, are really relevant to today’s consumer. In the hands of the right bartender and promoted properly, these products can deliver on both experience and value,” he said.

It seems that Red Robin is heeding the “right bartender and properly promoted” with its roll out of wine shakes in order to combat the sales decline in restaurant alcohol sales.

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