According to USA Today, the average American consumer dedicates one percent of all their spending to alcohol. That’s $1 out of every $100, amounting to a multi-billion dollar industry. About a quarter of that is spent on-premise.
Restaurateurs who meet the demand for on-premise alcohol consumption enjoy high profit margins averaging 500 to 600 percent. Which types of alcohol are most profitable, and what strategies maximize your profits from these beverages?
With growing consumer interest in signature cocktails and craft beers, today’s restaurateurs must meet the challenge of differentiating themselves. Here’s to creating a memorable experience for your drinking patrons.
Be exclusive.
Create a unique elixir that the bar down the street, or on the other side of town, doesn’t offer. Depending on your market, this could vary from a menu of unique infusions to an affordable selection of fun cocktails. Your restaurant should be recognized for your specialty cocktail menu, and be a go-to spot to meet a particular mood or craving.
Tip: Do you cater to an upscale and modern professional crowd, or a university crowd that prefers a hip but laid-back vibe? A signature drink menu should stem from your knowledge of what sells. Revel’s Intelligent Reporting compares what your bartenders pour most during Happy Hour vs. closing hour, as well as how weekend tastes shift from that of the after-hours working crowd.
Choose quality beer.
The Brewer’s Association states that a craft beer customer’s bill is $16 higher on average than someone’s who is drinking regular beer. According to the latest U.S. Beverage Alcohol Forum report, beer sales recently saw a 0.5% sales increase after consecutive declines in the years leading up to 2012, with premium, craft beers growing most at 9.8%.
Tip: Keep your taplist current and show it off with social media. Make sure your website lists everything from the breweries you partner with to ABV content and hop varieties. As you set your price points, it helps to have a POS system that automatically generates profit margins for every product you sell on a daily basis.
Hire experts.
There’s no undervaluing the worth of a knowledgeable sommelier or bartender. According to New York Eater, the general willingness of consumers to try something new is driving changes in the entire beverage world. Many consumers leave it to the expert to decide on the wine selection or choice of spirits. It’s no wonder more and more sommeliers and bartenders are opting to open restaurants of their own. Bring one of the best on board your establishment to increase reputation and profits.
Tip: New product innovation and premium, artisan varieties largely grow and shape the alcohol industry today. As you expand, invest your resources into the recruitment and retention of talent with knowledge and passion for wine and spirits. Even the most casual restaurant should have beer servers who can effectively respond to what IPA’s you have available and which local, seasonal varieties you’ve chosen to highlight and why.
Entice new customers with a promotional alcohol selection or price point. Use Revel’s Loyalty Program to track, build, and manage your customer loyalty base.
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