On-premise beverage alcohol sales broke the $100 billion mark in 2007, coming in at $102 billion, an 8.3 percent increase, according to The Beverage Information Group’s Handbook Advance 2008. That’s a $33.2 billion revenue increase since 2002, certainly reason to celebrate.
The gain actually is a bit slower than 2006’s 9.2 percent increase, however, and just about every facet of the beverage alcohol industry, with the exception of wine, experienced slower rates of growth last year. Even Yellow Tail, the knock-out Aussie wine with skyrocketing sales earlier in the decade, saw growth decline precipitously from double-digits in 2005 to slightly more than one percent last year.
An 8.3 percent overall increase is nothing to sneeze at, nor is Yellow Tail’s 1.2 percent gain on 8 million cases. But looking ahead, we know an economic softening is in store for 2008; many restaurants that had been enjoying growth already are experiencing a slowdown in traffic and sales. Although the National Restaurant Association projects 4.3 percent growth for full-service restaurants in 2008, many operators now fear their own growth train will be derailed by forces outside their control. The question is how operators can keep growing even with the soft economy.
The 2008 Growth Brands, Cheers’ annual report on the fastest growing wine and spirits brands, hint at an answer. Almost the entire industry spectrum is represented—from high-end tequilas to value-priced flavored vodkas, from super- premium imported wines to bargain boxed varietals. But among such diversity, each and every Growth Brand shares a common characteristic: it connects with the consumer. Whether via tangible elements such as value pricing, convenience or flavor, or more qualitative factors such as brand image or affordable luxury, these brands forge a connection with the consumer. The really good brands continuously strengthen that connection for sustained growth, making adjustments along the way.
Good on-premise operations do the same, nurturing the connection with their guest through value, quality, flavor, experience or the combination of several elements. Those that excel at it find a way to grow,even in a soft economy. Discovering how to forge stronger bonds is the key to driving growth worth celebrating.