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Food & Beverage

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August 5, 2011 By: Alissa Ponchione Night Club and Bar Magazine

Pour More Profits with Strategic and Sophisticated Alcohol-free Options


CactusWhen patrons enter your bar, club or restaurant, they expect choices — variety, after all, is the spice of life. From esoteric beers to boutique spirits and worldly red and white varietals, your drinks list should run the gamut of beverage options. However, without alcohol-free drinks available to your guests, you’re missing out on a lucrative market that can affect your bottom line.

Robert Plotkin, NCB contributing editor, beverage management trainer and author of “Secrets Revealed of America’s Greatest Cocktails,” breaks down the reasons for incorporating an alcohol-free selection into your drink program.

“These drinks are loaded with profit,” he explains. “They fulfill a definite need from a liability standpoint, but they appeal to an ever-growing segment of consumers,” which includes people who choose not to drink alcohol, pregnant women and designated drivers.

If you’re just testing out the alcohol-free waters, start small and keep it simple. Plotkin recommends creating one signature alcohol-free drink that will become your claim to fame. Additionally, by making it available to your staff during shift breaks, you inadvertently make them love it, so “they get addicted to the drink, and they will offer it to a customer. ‘We drink it here. We love this thing,’” they’ll say. A staff member’s endorsement will entice customers to try a new drink.

However, marketing alcohol-free drinks with the right presentation and language also is important. Kathy Casey, president of Kathy Casey Food Studios - Liquid Kitchen, says that with alcohol-free beverages, you need to remember you’re dealing with adults, and “they don’t want to look like they’re not having something sophisticated. Glassware is important to developing a stylish alcohol-free drink, as well as adding interesting garnishes, foams and whips, and creating your own infusions or housemade liquids.”

Menu language “should be cool verbiage. It shouldn’t be an afterthought, and [it should] fit the style of your menu and concept,” she says.
“It should be all of those things,” Plotkin agrees. “[Alcohol-free drinks] need to be presented on the drink menu in a way that they present panache like all the other drinks that are part of your beverage program.”

The Price is Right
A drink’s “panache” certainly is about the good-looking glass and well-conceived garnish — the whole design that creates that pizzazz and “wow” factor — but Plotkin knows this is not easy. Creating attractive options will help you sell drinks, but pricing can make things more complicated.

“There’s a bit of a glass ceiling [with alcohol-free drinks],” Plotkin explains. “Signature [alcohol] drinks can sell for $14. They’re involved and gorgeous and loaded. It’s not only worth it, but it looks like it’s $14, and consumers think it’s worth that much.”

Bar owners and operators cannot charge an unlimited amount for alcohol-free drinks.

“Most alcohol-free drinks, priced along the lines of a standard Margarita — the cost percentage is anywhere from 17% to 19%. You’re looking at a profit margin of 83% to 81%,” Plotkin says.

So, for a $14 specialty Margarita, that’s $11.62 or $11.34 profit.

Although priced lower than alcohol beverages, a well-made signature alcohol-free drink can bank on a considerable profit margin of approximately 70% to 81%, about $3.25 to $3.50 for a beverage priced at $4 to $5, Plotkin explainsCactus.


Bartenders at Cactus Restaurants in Seattle serve up delicious and refreshing alcohol-free drinks, such as the Perfect Prickly Pear (right above), the Summer Envy (above, right) and the Pepino Smash (below).


“There’s money to be made,” Plotkin says.

At Cactus Restaurants, with three locations in the Seattle area, Co-owner Bret Chatalas knows the significance of pricing all too well: “I can’t charge $7 for non-alcohol cocktails. It’s more than a soda but less than a cocktail.”

Instead, he prices the Mexican Lemonade, Melon Agua Fresca and other options at $3 to $4. This price point benefits his bottom line in the long run.

“For example, if I sell a soda for $2, and it costs me 20 cents to serve it, then that profit is $1.80,” he says. “If I can get a non-alcohol cocktail, it might cost 50 cents, but we make $3.50 instead of that $1.80.”

Although the added revenue is a plus, Chatalas says featuring five original alcohol-free drinks on the Cactus menu is about more than just money.
“It also differentiates us,” he says.

Casey, however, believes pricing is flexible. She says casual concepts can charge $5, but a higher-end establishment could price non-alcohol drinks from $8 to $9. People are willing to pay these prices, she says, because “a lot of people don’t drink, and they want something special, too.”

“We don’t want them to have a water that doesn’t leave a lasting impression,” explains Stuart Melia, beverage operator of CraftWorks Restaurants & Breweries, which owns more than 200 Gordon Biersch Brewery Restaurant, Rock Bottom Restaurant & Brewery, ChopHouse & Brewery and Old Chicago concepts as well as seven specialty concepts throughout the United States.

Using quality ingredients in non-alcohol drinks, such as the Watermelon Lemonade (housemade lemonade, fresh watermelon and Monin Gourmet Flavorings Watermelon Syrup) served at the Gordon Biersch and Rock Bottom restaurants as well as the Blackberry Mint Cooler (fresh blackberries and mint) served at the ChopHouse & Brewery restaurants, creates additional value for CraftWorks’ concepts. In turn, value translates into repeat customers who come back specifically for those drinks.

“As we do any kind of analysis, we’re always looking for the greatest amount of margin,” Melia says. “There are certainly more costs involved with the Watermelon Lemonade than serving a soda product, but the way we look at it is, it has to be profitable financially. We work our price points to have as good as a margin or more as we would with selling a soda.”

Quality Ingredients Need Quality Time
Quality ingredients are crucial, but alcohol-free drinks need quality time, too. Alcohol-free options often take as much preparation time as alcohol cocktails. Gina Chersevani, mixologist at PS 7’s in Washington, D.C., finds this to be especially true. The cocktail list there includes 16 drinks, and Chersevani can make an alcohol-free version of each for non-imbibing guests.

For example, to recreate the taste of gin in the alcohol-free version of the Gnome’s Water cocktail (Hendrick’s Gin, cucumber water, lemon lavender syrup), she adds a tincture of juniper.

Cactus

“It’s real ingredients and real work,” she says. “It’s the ice, the squeezing of lemons and cucumber. It’s not the alcohol; your big expense is the rest of the ingredients.”

Yet, the extra effort is worthwhile because she sells the non-alcohol versions of the cocktails for $6, which provides a much better revenue stream than a $3 soda that comes with free refills. Additionally, guests typically order a second alcohol-free drink, further increasing profitability.

“To have a killer alcohol-free beverage that people know you for is exciting,” Melia explains. “You become known for that; it’s part of the decision-making process.”

An alcohol-free drink can become the reason guests choose your bar or club for lunch or dinner. A bar owner or operator should always be asking, “What can you get from us that you can’t get anywhere else?” Melia advises.

However, Plotkin notes that most alcohol-free programs are abysmal failures, as operators often take the path of least resistance, giving them “scant attention,” and creating “prosaic and boring” options that use similar ingredients, such as grenadine, grapefruit juice, cherries and orange slices. These operators are missing the boat, especially when so many ingredients — from açaí and blueberry to infused waters and housemade sodas — are now so readily available.

Guests will order a first and then a second round of signature alcohol-free drinks, but only if you’re crafting them with the same quality ingredients, care and intensity you use in your signature cocktails. Once you focus on these areas, your establishment will not only gain clientele but profits as well — something you certainly can’t afford to miss. NCB


Alcohol-free Innovation

Kathy Casey, president of Kathy Casey Food Studio - Liquid Kitchen, and her staff create innovative, cool and unique options to boost profit margins. Following are some simple yet fun ideas to ignite your alcohol-free beverage program:

Casey recommends creating your own simple housemade sodas. “That’s the biggest trend that’s going to start going on — any kind of housemade sodas are hot. It’s a soda-fountain revival!”

“Everyone wants to attack water because it’s your biggest enemy,” Casey notes, but you need to get customers to “buy up.” Casey says carbonated infused water is a great high-end twist on H2O. She recommends using systems such as iSi Twist and Sparkle Beverage Carbonating System; guests can see the water carbonating in the container while you serve it for an undeniable visual “wow” factor.

Adding syrups like those from Monin Gourmet Flavorings or a little cucumber and carbonation make for tasty and aesthetic water additions as well. Casey says presenting infused water in handblown glass bottles at the table gives it a luxurious edge for guests.

Hand-cut ice cubes as well as housemade whips and foams are a couple of elements that make alcohol-free drinks stand out on your menu.
Don’t make your alcohol-free drinks overly sweet. “Think of them as refreshing, dry and sophisticated,” Casey advises.

One of Casey’s favorite drinks is a carbonated water infused with mint, cucumber and Clementine.


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