Fine-Dining Establishments Trending GrowthJanuary 23, 2012 By: Emily Hanna Mayock
If You Build an Experience, They Will Come
We’ve heard it all before: In today’s “tough economic times” — aka “the downturn,” aka “the recession,” aka any other gloomy term you could use to describe today’s financial state — guests are trading down to save money. But recent findings from consumer market research firm NPD Group show otherwise: The growth of visitors to fine-dining establishments actually has been stronger than those opting for a casual night out.
“You would expect people might be trading down a bit to those less expensive venues,” says Warren Solochek, vice president of client development at NPD, “but we’re actually seeing fine dining coming back.”
One possible reason for this change in trend: People treat dining out as a special event — and that view is fueled by the experience fine-dining restaurants provide, Solochek explains.
The findings come from NPD Group’s CREST report, an online survey of 2,000 consumers daily regarding their on-premise dining and drinking habits.
As evidence to the experiential trend, Solochek notes that the CREST survey asks people where they were before attending dinner, and a growing number are coming straight from home; they’re making it a point to go out to dinner, rather than just going after other outings or while on a business trip. These people, he believes, are simply looking to have an “indulgent occasion.”
People are not only looking to indulge in terms of price or quality of food, but also in the distinctive experiences available at a bar or restaurant. Wine flights, microbrews and specialty cocktails all sell much better at fine dining establishments than at their casual counterparts, Solochek says. This, he believes, is partly because patrons at fine-dining establishments can afford to spend more on beverage alcohol but also because fine-dining establishments offer options patrons might not be able to get elsewhere.
The originality factor is a big product seller. In both beverage alcohol and alcohol-free drinks, “new beverages are gaining at the expense of some of the old standards,” Solochek says. “You have people who say, ‘I want to do something new, I want to try something different that I can’t get at home.’ Again, they’re looking for that experience.”
This is especially true in the world of beer. In looking at sales growth among beer types — import, domestic and microbrews — the vast majority of growth is in microbrews, Solochek notes. “That ties back to having those more unique opportunities and having something different for people to order up,” he says.
And, of course, it helps if servers can actually sell the unique — sometimes more expensive — offerings. Suggestive selling is crucial to all establishments but is done particularly well in the fine-dining sector, Solochek remarks. Anecdotally, there is an obvious cause-effect relationship from server recommendations to patron orders. “People believe that servers, whether they’re bartenders or wait staff, are a credible source, so that says it’s really important to have your serving staff trained appropriately,” he notes. “In the same way that they’re expected to know what’s in the food, you’d expect them to have the same knowledge of the drinks.”
The knowledge and training prevalent at many fine-dining establishments helps sell products, and it’s an obvious area of improvement among casual-dining options, Solochek says. Additionally, Solochek sees the same opportunity for progress in chains and independent restaurants.
Broken down by chain vs. independent, Solochek says the incidence for beverage alcohol tends to be higher in independent restaurants than chains, although, visit-wise, chains have weathered the recession better than independents. These findings leave plenty of room for growth in the chain beverage world. “There’s a lot of upside potential in the major chains if they would put as much focus on beverage alcohol as they do food,” Solochek says.
Improving sales is all about being able to offer your guests an experience they won’t soon forget — one they can’t get at home that’s created through an inviting environment, a well-trained staff and a high-quality, diverse menu of food and beverage offerings.
Want more insight? Solochek and NPD Group will unveil their latest research at the VIBE Conference, March 13-14 in Las Vegas. The new research, fielded in November and December, will look at different channels in the on-premise industry — dining, bars, nightclubs, hotels and more — and uncover why consumers order what they order and how you can better appeal to them. Some topics Solochek will discuss include:
• When do we tend to purchase certain adult beverages and why? Is it driven by brand availability? Bottle or glass options?
• How important are promotions as an incentive to purchase?
• What happens when my preferred adult-beverage brand is not available?
• How important is price in beverage choice? Is this true for both adult beverages and non-adult beverages?
The session, titled "The Mixology of Consumer Beverage Choice," will take place March 14 during Workshop No. 2 (1:45 to 2:45 p.m.).
For more information on the VIBE Conference and speakers, visit www.vibeconference.com.