According to Technomic, Inc. research, on-premise consumer expenditures on alcohol (spirits, wine, and beer) are expected to continue to increase in 2007. However, Technomic cautioned that sales are moderating. “Some growth has been the result of the shift to premium/super premium brands, especially in spirits,” says David Henkes, executive director of Technomic’s Adult Beverage Insights Group. “But if consumers have been spending more, it’s primarily because operators have been raising prices – a strategy we believe will be increasingly difficult to sustain.” David reports that many operators (especially in casual dining) are experiencing consumer “value ceilings,”and that to continue growing their businesses, they need to develop innovative programs that increase volume and drive incremental sales.

Source: Technomic, Inc.

“It’s critical for operators to understand how much business they are capturing,” David says. “If they aren’t getting enough orders, then they need a plan to get more people to have even just one drink – a better happy hour, promotions, etc. To upsell, a beverage program needs a point of differentiation – unique mixed drinks, premium/super premium products, craft beers on tap, signature drinks, unusual wine lists, etc. Bottom line, it’s about getting the maximum potential out of all dining occasions.”