Top Minds in the Industry
Shared Insight on How to Reach
the New Consumer

The on-premise industry is much like a wild river, the current of which is made of ever-flowing and changing trends and consumer preference shifts, and operators guide their venues like rafts toward the profit at the end of the ride.
    Some truly brilliant minds of the beverage world provided insight and wisdom for operators in guiding that raft over the rapids. The Sunday Power Lunch brought attendees together for a delicious meal and even tastier insights into beverage sales from two major players in the industry, and keynote addresses from top executives furthered the learning.

Steele-ing a Share
    At the Power Lunch, Steele Platt spoke from the perspective of trial and error that has resulted in the resounding success of the Yard House restaurants he founded, which are “all about beverage,” he said. “Forty-five percent of our sales is in beverage. Our average store does about $9 million a year (in beverage sales).” On the wheels of that beverage program, Platt, in less than 10 years, took a single restaurant concept to 16 units, with sales exceeding $115 million a year.
    The key is a hook, Platt said, explaining that the Yard House’s hook is its centralized beer bar. “Every restaurant needs a hook,” he said. “You really have to be different. The market today is very competitive.”
    Platt continues to be integrated in the details of each location of the Yard House on a daily basis; in fact, he personally has picked every song played every day across the chain for the past 10 years, from a library of 5,000. “I’m in control of my atmosphere, as all of you should be, as owners.”
    For Platt, the process of creating an emotional reaction for guests requires a balance of food, beverage and atmosphere, all of which drive each other, he said.
    Echoing Taffer, Platt said, “The day you feel you’ve succeeded is the first day you fail.”

On-Trend
    Brian Yost, vice president of food and beverage for Harrah’s Las Vegas, came to the Power Lunch crowd with an amazing history in the industry. A key player in the beverage operations of Euro Disney and Disneyworld, with more than 15 years of experience as vice president of beverage sales for Marriott International, Yost enthusiastically said that two major reasons today to build beverage sales are the recent revolution of stylish cocktails and what he called the “superior drinks culture” of guests moving up in what they order.
    Key beverage trends Yost discussed included home brewing, tasting parties by a younger demographic, fuller flavors, nostalgia (such as the popularity of Pabst Blue Ribbon), non-alcohol options proliferating, a desire for value, and occasion-based choices. But, Yost really captured the crowd’s attention with his Top 10 Beverage Secrets.

The New Beer Approach
    No matter how clever and calculated operators get on-premise, supplier marketing also influences consumers heavily, but the two are intertwined to create an important dynamic, said Monday’s keynote speaker Norman Adami, CEO of Miller Brewing Co.
    “If a brand’s strength is made on-premise, you can’t stop it as you can in other channels by dropping the price of suitcases, hoping to discount your way past the weak times,” Adami, said, in his identifiable South African accent. “I believe the American beer industry is at a critical crossroads, and I believe that your establishments will serve as the initial proving ground for whether or not we have chosen the right road.”
    Adami explained that the big three brewers, until recently, had gone for the market’s jugular by grabbing at the lowest common denominator in its advertising. Anheuser-Busch led the way with major success, Adami admitted, saying that Miller sought to emulate it. Soon, Adami said, a crippling sameness overtook all beer advertising until no brand’s message stood out.
    “While we were pushing sameness and low brow, two major consumer movements were headed in the exact opposite direction,” Adami said. “Those two movements had been brewing for years, but really began to pick up steam as we came into the new century ... The first movement was the demand for increased personalization as people increasingly sought out products that met their individual needs and brands that satisfy their individual wants ... Consumers increasingly walk away from any brand that looks or feels like it’s too broad or designed for the masses.”
    “The second movement is related to the first. That movement is commonly known as mainstream sophistication. Huge numbers of consumers began to want their products and brands to reflect a sense of style and design that more accurately reflected how they see themselves. They weren’t going high brow, but they were becoming increasingly uninterested in low brow.”
    Miller, for one, has found a new driving wheel with market segmentation, targeting specialized demographics with specific brands, with better messages.

Connecting with Consumers
    The changing consumer also was the focus of Steve Cahillane’s Tuesday morning keynote. As CCO of the world’s largest brewer by volume, InBev — whose brands hold leadership positions in 20 major markets and have a presence in 120 countries around the world — Cahillane is intimately familiar with what it takes to get consumer reactions with brands such as Bass, Stella Artois, Beck’s, Labatt Blue and more. “We brew and market some of the world’s best beers,” Cahillane said, “but all that doesn’t mean a lot if our beer is not connecting with consumers ... They are the fuel that runs the engine for you and your businesses ... At InBev, they are the center of our company’s mission, and that is to create enduring bonds with consumers by providing the brands and experiences that bring people together.
    “Connecting with their values and motivations is the only way we will keep them as our customers.”
    Cahillane urged operators to study and observe how patrons’ desires are changing, including where and how they get their information. “We all need to look outside our own limited view, beyond food and beverage, because there are a lot of great lessons to be learned in how other segments and product categories are addressing today’s consumer. iPod is a striking example of this. The technology is slick, but let’s face it - it’s the cool image that’s driving sales. Their ads are talking to people. If you look at fashion, cosmetics and cars, you see examples of brand overturning old marketing conventions to make a fresh connection.
    “Today’s consumers want to be perceived as knowledgeable and discerning about quality products, particularly in a social environment.”

Creating Reactions 

Marketing on MySpace and More 

Talk With Your Fan Base

    While marketing to new patrons definitely was of importance at The Show, so was the business of profiting more from regulars.
    Beverage consultant and writer Robert Plotkin, in his panel Ten to Win Patron’s Hearts, estimated that “90 percent of your sales come from people who already enjoy your product.” Attaining and retaining regulars can be accomplished by simply talking to them, Plotkin said. Pointers that seem basic served to remind attendees what’s important.
    “Get out and talk to people,” Mike Corbett of Great Plate Bar and Grill said. “Everybody that comes through the door would like to know the owner.” Lisa Lamarre of Wildly Different suggested getting your staff business cards to hand out and putting your staff in T-shirts promoting the bar for any city-wide event. “Think about your regulars. They want to see your establishment thrive.”

    Other promotions discussed included party buses to and from the bar for sporting events or concerts, make-it-yourself Bloody Mary bars, Russian Roulette chicken wings with two extra spicy hidden within each dozen, late-night Happy Hours and myriad other promo ideas. No matter how you look at it, good promotions and solid execution are vital to success.
    “It is about 10 percent the promotion,” Greg Newman, co-owner of the Sharkeez chain in California said, “and 90 percent the way you execute it.”

    Every generation brings about change. In the ‘70s, it was the Disco craze. The ‘80s brought about wild parties, Bret Easton Ellis style, paired with Punk Rock music and Reaganomics. The ‘90s was about Grunge Rock, Generation X and a slacker attitude. Today’s generation has moved into a healthier, safer lifestyle, which affects how and where they consume. Hopefully, as an operator, you have the product that they’re looking for — food.    The latest trend in on-premise consumption is increasingly to break bread where one imbibes, and a few key speakers at “The Show” talked on the topic.
    During the Power Lunch, Brian Yost, vice president of food and beverage with Harrah’s Las Vegas, told attendees that patrons would rather eat in a bar than drink in a restaurant. He offered several pointers to consider in making an establishment the place to satiate a customer’s appetite and recommended the inclusion signature items on the menu and to get the staff behind them so “they’ll sell it all day long without thinking about it.”
    “Give servers hooks they can hold onto,” Yost said.
    Proper pricing is important, keeping in mind that it’s market-relevant and delivers value through product, service and quality.
    “This is a fun business. If you’re not having fun, get out of the business,” Yost said.
    While Thom Greco, president of Pennsylvania-based Greco Holdings, agreed that food has become a stronger calling card when it comes to the decision-making process of a potential patron and submitted that the socialized dining trend continues unabated.
    “It’s a more respectable social outlet,” Greco, a nightclub and bar owner many times over, said. “Dining is consistently voted the ‘most enjoyable’ evening.”
    Having a strong food concentration, even to go so far as marketing as a restaurant and not a bar, could help in beating out the competition. Greco suggested offering the idea of creating a themed food concept menu or a lifestyle menu.
    Some themes to consider are Pacific Rim-influenced menus, tapas, Cuban cuisine, modern Asian, and even Asian-Cuban food; Greco urged operators to associate themselves with a theme or concept, to become known in their markets as the go-to places for their particular specialty.
    “Dominate in your marketplace, so that when the newspaper wants to ask a question, say, about sushi, they call you,” he said.
    Greco also agreed with Yost on the fun factor. “It’s the ‘Wow Factor.’ Food is entertainment.”

    While spirits and beer executives are focusing more seriousness on responsible consumption and patron service, the beverage categories overall appear to be gaining momentum toward becoming more playful, as well. Call it the year of “sexcess,” or any other catchy buzzword that alludes to the fact that beverages — and their collective marketing — are getting both playfully sexier and more intriguingly, sophisticatedly successful, but 2006’s Las Vegas show beverage trends were indicative of just that.

Sexier Spirits
    As witnessed by the attendees and exhibitors at “The Show” this past March, there appears to be a continuing theme resoundingly echoed by (alcohol) beverage companies: if you make the product sexier and more refined, you will increase sales. Early into 2006, this seems to be true. While suppliers in the spirits category led the initial charge of adding more glitz and glamour to branding, packaging and marketing — in addition to recipes — beer and wine are not far behind. Accordingly, examples of this at “The Show” ranged from more eye-catching advertising drives by spirits purveyors to assertive launches of new beer brands geared to be more alluring and represent a more active, extreme lifestyle. Is it working? Most attendees questioned at “The Show” said yes.
    Vodka seems to be the most prominent category leader with its bevy of edgy labels and flavors, and it does account for roughly 25 percent of all spirits sold in the past fiscal year, but rum, liqueurs and more are gaining ground.
    “Spirits are sexier,” said Robert Plotkin in his Overhauling Your Beverage Program workshop. “The top end of the spirits side is what’s driving the growth.”

Choice is King
    While sales strategies for individual brands differ, the collective observation is that alluring and/or ultra-refined marketing and advertising efforts catch distributor, operator and guest interest — then the education of why a brand is unique, well-crafted or highly promote-able come into play. The steady influx of new brands into the marketplace may spur more competition in this arena and require more intensive education.