The Daily Rail: Off-premise beer consumption cutting into restaurants' profits

July 14, 2016

Today's Special

This Week in eSports… ESPN to air 18 straight hours of eSports coverage

This week's top eSports news: ESPN will air 18 hours of eSports coverage this weekend, leading up to their Street Fighter V championship battle; the UK gets a second eSports governing body; and CNN calls competitive gaming “must-see TV.”


Hey, hey we’re the Monkeys!

Researchers from Oxford University found ancient “nut-cracking” tools — 700-year-old stone hammers — that capuchin monkeys used to open cashew nuts. This is the earliest evidence yet of monkey tool use outside Africa. Researchers are digging more into it, but if their hypothesis is correct and that tools helped the capuchin monkeys colonize South America, this tool use behavior could be hundreds of thousands of years old.

Extra fun tidbit: The 700-year-old artifacts indicate a 100-generation tradition of tool use in capuchins. In human years, that would be the equivalent of roughly 2,500 years.

Hands off!

Research shows that the average person touches their cell phones 2,617 times per day. That includes picking it up, turning it on and off, opening apps, swiping and typing messages. The top 10% of cell phone users (and you know who you are) touch their phones more than 5,400 times daily.


Why it’s important to you: You won’t see this event next month in Rio.

Naked dining…what could go wrong? The Black Cat in Berlin made a special offer to diners during the annual erotic fair Venus — dine in the buff and eat for free. But they didn’t stop at just naked incentives. For those who didn’t want to go completely au natural, you could go topless and score yourself a free drink. No word on whether that offer was for both men and women, but we have an idea. The naked dining trend is no joke (ok maybe it’s a little joke) with naked themed restaurants “popping up” in London, Melbourne and Tokyo…although the Japanese version has age and weight requirements.


Why it’s important to you: The trend of increasing off-premise consumption is a threat to our industry’s growth.

The annual Cheers On-Premise Handbook (CHOP) is a detailed look at beverage sales and trends from our industry. The 2015 CHOP details several trends that merit your attention and should make you rethink some of your menu mix decisions and marketing approaches. To start, the overall on-premise beverage alcohol market was down from 2014 by 2.6%, which marks the third year of declines. The study makes a strong distinction between overall sales and volume that reveals two important trends.

For example, while the volume of beer sales was down 3.0% in 2015, the dollar sales were only off by 1.6%. This essentially says that less beer was purchased, but consumers paid more for what they drank. This is due to the consistent increases in craft brew consumption. The beer category overall (both on and off premise) saw volume and dollar increases in 2015 that demonstrate more consumers are drinking beer, the difference being they are doing so at home. That’s the bad news, but there is some good news. Spending on spirits increased by 2.5% in 2015 while volume dropped only 0.1%. This means that consumers traded up for premium spirits. Wine stayed essentially flat.

The CHOP report leaves us with two key takeaways. First, craft beer is the only way you will see consumption increases. Since you are competing heavily with consuming at home, you have to make your craft beer program sufficiently enticing as to get folks to come to you over the package store. Craft Beer Nights, special incentive programs for trying new products or minimally having a GREAT craft beer selection, should all be a part of your beverage planning. 

Second, take a good hard look at your back bar and rethink what you keep. Whiskey and brandy/cognac have been growing segments over the past 10 years and clears (vodka, gin and rum) have been oversaturated. Do you have 10 vodka lines and three individual bourbons? Flip that script. Learn about whiskey and other premium spirits and leverage the trend of consumers trading up to premium, but drinking less.

The truth is, you already knew about this trend by looking at your own sales mix. The question is will you respond and use it to your advantage or will you allow inertia to hold you in place and see your beverages sales slide slowly away?


Why it’s important to you: The system is broken.

There is a long tradition of activism among athletes and last night at the annual ESPY Awards Show, there was a call to renew that tradition. Carmelo Anthony, Chris Paul, Dwayne Wade and LeBron James started the program with a crafted call to action, challenging their fellow athletes to step up and be the change that fixes a broken system. 

Here’s the thing: do we believe they are really committed to this activism? Have we grown so cynical that a heartfelt appeal from a famous millionaire athlete is discounted and ignored? The answers to those questions fall to each of us alone. If their speaking up causes others to consider how to fix what ails us, then it was a worthy enterprise. However, if this is the last we hear from these men and other athletes about the issues that matter then the cynics are proven right.