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What’s Driving On-Premise Sales in 2011?

March 21, 2011 By: Alissa Ponchione


Mike GinleyAt the VIBE Conference in Las Vegas March 9-10, Mike Ginley, Co-founder of Westport, Conn.-based Next Level Marketing, presented “What Today’s On-Premise Consumers Want.” Armed with online survey responses from more than 500 legal-age consumers who had visited top chain restaurants and ordered spirits, wine and beer in the last 30 days, Ginley extolled advice on what casual dining concepts should do to entice imbibers in the coming year and what they should do to maximize revenues.

In fact, for on-premise operators, things are taking a positive turn, Ginley said, noting that spending is returning to normal. The trend is strongest among males and younger consumers, who are recovering the fastest from the recession. Spending in bars and restaurants is rebounding, with 32% of consumers surveyed saying they are spending less this year than last, compared with 70% giving the same response a year ago. This is good news for your business, and yet it’s also important to know what’s driving these consumers to visit your restaurants.

According to the study, 42% said they seek out bars and restaurants that offer great drinks at a good value, while 25% (38% being male) choose places with a good beer list; 15% (23% being women under 40) choose based on the spirits selection. For male and female consumers under 40, 16% prefer locations with specialty drinks you can’t find elsewhere and 16% want a place that offers a better beverage menu than any other establishment.

By examining these numbers more closely, Ginley found that 75% of consumers define value as the highest quality for the best price and not just the lowest price, while 16% define value as the lowest price and 9% define it as the highest quality.

Once you’ve gotten consumers into your bar and restaurant, then you need to make them stay there. Ginley said it’s important to offer drink menus and drink specials, as well as adding drinks on a food menu (in fact, repeat your core drinks on multiple menus). Market your drinks with tabletop promotions, while also making sure your beer tap handles and bottles on your backbar are visible to consumers.

These steps are important because 71% of beverage decisions are made in the unit while only 29% are decided in advance. For consumers under 40, that number rises to 85%. A well-trained and friendly staff can convince a consumer to switch to a premium brand or specialty drink offering, which means upselling is not only important but possible because consumers believe better ingredients make better drinks and will pay $2.42 more for premium beer, $3.19 for premium wine and $3.20 for premium cocktails.

Influencing the decisions of your clientele and leading them to what they consider to be the best value is a surefire way to increase your profits. Younger consumers, especially, are more open to suggestions, drink specials and promotions. Consider including these ideas on your beverage menu, and you will undoubtedly reap the (monetary) benefits.


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