On the House

Latest Poll Results: Most Wanted Anheuser-Busch To Stay American

On Sunday, July 13, the board of directors at Anheuser-Busch voted to accept InBev’s aggressive takeover bid. Budweiser, the “King of Beers,” will be in the hands of Belgium-based InBev, ending weeks of bickering, lawsuits and counter-suits. As the saying goes, everyone has their price, and apparently the Belgian brewer’s bid became more attractive and harder to refuse as it upped the offering to $70 a share, for a total value of about $50 billion.

But as the results of our latest poll show, not everyone was pleased with these turn of events, and the newly-named “Anheuser-Busch InBev.” In fact, just a bit more than half of all respondents felt that A-B should have blocked the acquisition. This group agreed that A-B is as American as apple pie and baseball and should not fall into foreign ownership. Some even signed up at SaveAB.com, which drew more than 72,500 signatures.

However, other segments were more open-minded in their point of view. Approximately 18 percent agreed that they could accept the acquisition, depending on the deal’s terms. If InBev promises to keep A-B in its home of St. Louis (which it has) and keep all U.S. breweries operational (InBev said yes to this too), then they could accept InBev’s ownership.

A third segment – almost 17.5 percent -- felt A-B’s ownership doesn’t matter that much, as long as the products stay the same and quality is maintained. And finally, the fourth segment, the one with the smallest percentage – roughly 15 percent – considered A-B’s financial future and agreed that it’s in the brewer’s best interest to accept ownership from a large, multi-national company like InBev. The segment reasoned that Budweiser’s earnings would likely be enhanced and that A-B’s stockholders, in particular, would garner better returns with InBev in charge.

Indeed, pressure and lawsuits from A-B’s stockholders helped to persuade A-B to go with InBev. Former chairman and CEO August A. Busch III, father of the current chief, August Busch IV, retains a large stake in A-B, with 4.6 million shares, which would be worth about $322 million when the deal closes. Even that substantial amount pales when compared to what Berkshire Hathaway’s Warren Buffett stands to gain from the deal: his ownership of 35.6 million shares of Anheuser, worth about $2.5 billion. Check out our latest poll at bevinfogroup.com.

Cheers Magazine Announces Winners of the 2008 Cheers Benchmark Awards

Cheers magazine, the premier on-premise beverage resource, announces the winners of the 2008 Cheers Benchmark Awards. Now in its second year, the Cheers Benchmark Awards (Beverage Excellence for Non-Chain Hospitality Establishments) are presented in three categories: Best Wine Bar, Best Beer Bar and Best Cocktail Lounge. The winners are:

Best Wine Bar
Madison & Vine
Hospitality Holdings
New York, N.Y.

Best Beer Bar
Great Lost Bear
Portland, Maine

Best Cocktail Lounge
Pegu Club
New York, N.Y.

“With all the media attention lavished on bartenders and bar proprietors today, it’s no surprise that some attracting the spotlight are a little stronger on sizzle than they are on substance,” said Cheers Editor Donna Hood Crecca. “In reviewing the more than 50 entries to the 2008 Cheers Benchmark Awards, there were a handful of such sizzlers, but most also came with plenty of substance.

“Our three winners this year are long on substance, but they also have their own unique sizzle, a combination that keeps patrons comfortable yet intrigued and ensures servers and bartenders are engaged and enthused. Congratulations to the 2008 Cheers Benchmark Award winners!”

To qualify, entrants must be independent operators, defined as a concept operating in no more than five locations and independently owned or part of a hotel or multi-concept restaurant company.

In reviewing the entries, the Cheers editors and a select group of wine, spirits, and beer experts considered the overall concept, bar design, ambiance, level of service, beverage selection, beverage menu, specialty/signature beverages, merchandising, dedication to guest education and beverage enjoyment and staff/server training of each entrant.

For more information about Cheers magazine, and the Cheers Benchmark Awards, contact Cheers Editor Donna Hood Crecca, at (631) 265-3839 or email dhc@m2media360.com or visit www.bevinfogroup.com.

Latest Poll Results: Views on Pa.’s Kiosk Wine Sales Mixed

Our most recent poll garnered a near-record of responses, and viewpoints were varied. The issue that sparked the significant response concerned the installation of roughly 100 satellite wine kiosks in Pennsylvania. The Pennsylvania Liquor Control Board has proposed setting up the kiosks at or near grocery stores and malls in the state as a way to modernize the way it sells beverage alcohol. Approximately 30 percent of respondents agreed with the PLCB that the free-standing kiosks represent a modernized, and quite convenient, way to get wine into the hands of consumers.

However, the largest segment of poll respondents – nearly 35 percent – felt that wine sold in kiosks would end up in the wrong hands. This group expressed strong concern that kiosks would enable underage consumers to get access to wine, even though the PLCB has said that driver’s licenses and other forms of identification must be presented by anyone purchasing the wine at kiosks.

The third and fourth groups of poll respondents were nearly tied – they received roughly 18 percent each. One of these groups agreed that selling wine via kiosks was not good, but for a different reason than the possibility of underage consumption. They felt these sales could cut into the earnings of state off-premise liquor stores. And the last segment simply felt that while the ideas was a fair one, it would likely not have much of an impact on the sale of beverage alcohol in Pennsylvania. To participate in our currently posted poll, please visit www.bevinfogroup.com.

Latest Poll Results: Craft Brewers Should Just Pass on Costs

In our most recent poll, we stated that higher ingredient costs and other supplier costs have some microbreweries scrambling. These costs have risen sharply; for example, the price of barley has risen to roughly $400 per metric ton (compared to about $125 - $135 in 2005). In some cases, craft breweries can’t even get the right types of hops they need to make their beer, as these supplies have been quite limited. We asked how microbreweries should handle this crisis, and the majority of respondents had a definite point of view. Nearly 70 percent agreed that craft breweries should just pass on these costs directly to customers, simple as that. After all, they concurred, craft brews are enjoying a wave of popularity in the U.S., showing very strong growth, compared to other beer segments.

However, approximately 20 percent had a different point of view, and this group agreed that these brewers need to find ways to use cheaper or alternative ingredients and/or packaging, if at all possible. The third segment – just over 10 percent, said the best course of action for craft brewers is to cut back on production and/or limit distribution until supplier costs become more reasonable. The fourth possible answer -- Merge with larger brewing companies, as they have more bargaining clout and can better absorb cost increases – received no votes. To respond to our current poll, visit Bevinfogroup.com.

In Latest Poll, Strong Response Indicates Pernod Ricard Overpaid for Absolut

We received a very strong response to our latest poll question, which asked if Pernod Ricard paid too much for Vin & Sprit this month. Pernod agreed to shell out 5.6 billion euros (nearly $9 billion) to purchase 100 percent of the shares of Vin & Sprit, whose brands include the fast-growing Cruzan Rum, and its crown jewel, Absolut Vodka. A bit more than half of all the respondents said yes, Pernod absolutely did pay too much. It paid roughly 20 percent above top-end estimates made by securities analysts, and the company will nearly double its debt load, as it plans to finance the deal almost entirely with debt.

However, approximately 28 percent were a bit more hopeful. They agreed that the purchase price could be worth it, if the new owners develop a significant way to market the brand. Crafting an outstanding marketing strategy that could compete in today’s very crowded vodka market – where new entrants are being launched almost weekly – could give Pernod a substantial payoff, they reasoned.

Another group could not say for sure at this time if Pernod overpaid, but they agreed that time will tell. Just over 15 percent of respondents felt it would take months, if not years, to determine if the spirit company’s payout was worth it. And finally, roughly 6 percent of respondents were quite bullish on the amount paid out for Absolut. This segment agreed that the Swedish vodka, the second best-selling imported vodka in the U.S. and a leader on the global vodka scene with a well established brand with its memorable (and lately, controversial) advertising campaign – is well worth the purchase price. Check out our current poll, at BevInfoGroup.com.

In Latest Poll, Responses Mixed on Likely Market Acceptance of Absinthe

In our latest poll, we asked what the public’s response would likely be to the legal release in the U.S. of Absinthe. Last summer, the sale of the spirit dubbed “the green fairy” became legal after a ban of nearly 100 years was lifted by the Alcohol and Tobacco Tax and Trade Bureau. However, the Bureau placed some limits on the amount of thujone, found in wormwood, in the product.

The great majority of respondents – approximately 60 percent – agreed that Absinthe would most likely attract a niche market of followers – of those who can afford to drink the libation and enjoy its unique anise flavor profile. At least three producers of Absinthe are currently marketing their products in the U.S., and the spirit carries a super-premium price. For example, Viridian Spirits’ Lucid Absinthe, has a suggested retail of $60 for a 750 ml bottle.

Roughly 20 percent of poll respondents felt that the future of the spirit lies on the ability of Absinthe producers such as Viridian Spirits to forcefully drive the message home to consumers. This segment agreed that producers need to spend the money and effort to develop and execute promotional campaigns that not only raises awareness, but creates excitement and interest as well.

The third voting segment – almost 14 percent – felt strongly that Absinthe could be the next big thing behind the bar or on the shelves. This group believes that consumers’ seemingly endless thirst for new products and flavors in cocktails, coupled with a sense of curiosity for tasting a spirit that was previously unavailable and in fact banned – would generate strong interest and consumption.

The fourth, and final group, just over 6 ½ percent -- were not as convinced that the spirit would do well, and were concerned about Absinthe’s alleged hallucinogenic properties . Even though the government has ruled that only small amounts of thujone, found in wormwood, be allowed in Absinthe, this group agreed that consumers would still be wary and refrain from using the libation. To participate in our current poll question, visit www.BevInfoGroup.com.

In Recent Poll, Most Favor Direct Sale of Alcohol, But With ID Checks

In our latest poll, we stated that violations and noncompliance to state liquor laws have been on the increase, prompting the Wine & Spirits Wholesalers of America (WSWA) to send letters last month to alcohol regulators of all 50 states, strongly urging them to enforce the laws in place and crack down on violators. This is clearly a hot issue, and affects all segments of the beverage alcohol industry. It can also get complicated, as laws can vary from state to state. In our poll question, we asked if beverage alcohol suppliers should be allowed to ship product directly to consumers.

Interestingly, the majority of respondents – almost 42 percent – agreed that direct shipment of alcohol products should be allowed, but only if interstate purveyors check ID’s to ensure that the recipients of these products are of legal drinking age. However, while another approximately 28 percent of respondents agreed that beverage alcohol ought to be shipped directly to consumers, this group stressed that some regulatory body needs to be in place to ensure that tainted product or items expressly banned in certain jurisdictions are not sold or shipped.

But another large group of respondents – a bit more than 27 percent – disagreed with direct shipping. This segment feels that the three-tier distribution system is viable and works for the industry and that it should be the law in all 50 states. In another surprise, no respondents of the poll chose the fourth option: that where a ban on interstate shipping exists, enforcement should be stepped up and violators prosecuted to the fullest extent of the law. To check out the current poll question, visit www.BevInfoGroup.com.

In Latest Poll, NYC Regulation Posting Calorie Counts on Menus Called Unfair

Results from our latest poll indicated that a New York City regulation passed recently, requiring chain restaurants with more than 15 outlets nationally to display calorie information on menu boards, is unfair. The regulation is aimed at stemming obesity, and is set to start on March 31. However, restaurant lobbyists have been in federal court trying to obtain a restraining order while they fight the order (they have been successful in doing so in the past).

Two poll groups had roughly the same number of respondents – nearly 34 percent. One group agreed that the regulation is unfair, as it could lead to lost beverage business for operators. This could occur if consumers are negatively influenced by calorie counts on menus and decide not to order a cocktail or glass of wine; or, are dissuaded by calorie information from ordering a second drink. But an equal number of respondents were willing to compromise: They said the regulation could be fair if re-worked so that calorie information is posted not on menu boards, but elsewhere in the restaurant.

But there were other viewpoints as well. The two remaining groups – who each shared approximately 17 percent of the total vote – were split on whether it’s fair or not. One group said it’s fair simply because consumers have the right to know the amount of calories they are consuming during a meal at a restaurant. But opposing this, the other group claimed that since it is difficult to accurately gauge the number of calories in a cocktail or even a glass of wine, since drinks are often not prepared or poured in exactly the same way, it is best to leave calorie counts off menus. To express your views on our current poll question, go to www.BevInfoGroup.com.

In Recent Poll, Most Say Anheuser-Busch’s Purus Vodka Likely to Fill a Niche

In a recent poll, we asked if the launch of Anheuser Busch’s Purus Vodka would be the brewer’s big break into the spirits market. The majority of respondents – approximately 40 percent – basically said that time will tell, but the brand will likely attract a smaller, niche market of loyal followers, at least in the short term. This makes sense, as vodka drinkers tend to find a brand they enjoy and stick to it. However, roughly 27 percent felt the brand will be more widely successful, but only if the brewer backs Purus with sales and marketing muscle and/or gets a high profile personality to endorse it.

But roughly 20 percent of those who responded were more skeptical about the product launch. This segment agreed that the high-end vodka market is already saturated and Purus will likely remain in the background. The final group of respondents, however, heartily endorsed Purus Vodka as a product that would likely enjoy substantial success. They concurred that Purus Vodka is in tune with consumer trends of increased consumption in the super-premium spirits category as well as the popularity of eco-friendly packaging.

Cheers Magazine Announces Winners of the 2008 Cheers Awards for Beverage Excellence at Annual Conference

Cheers magazine, the premier on-premise beverage resource, today announced the winners of the 2008 Cheers Awards for Beverage Excellence at the annual Cheers Beverage Conference, held at the Hyatt Regency Downtown Miami, January 22 and 23.

Twelve program awards and two individual awards were presented by Cheers Editor Donna Hood Crecca. The winners are:

Best Chain Beverage Menu
Outback Steakhouse
Sponsored by Island Oasis

Best Chain Beverage Merchandising
Hard Rock Café
Sponsored by Diageo

Best Chain Drink Program
Ruth’s Chris Steak House
Sponsored by Skyy Spirits LLC

Best Chain Signature Drink
Walt Disney World Resort
Sponsored by Diageo

Best Chain Adult Non-Alcohol Drink Program
ESPN Zone
Sponsored by Monin Gourmet Flavorings

Best Chain Spirits Program
Bennigan’s Grill & Tavern
Sponsored by Pernod Ricard USA

Best Chain Beer Program
Buffalo Wild Wings
Sponsored by Anheuser-Busch

Best Chain Wine Program
Carrabba’s Italian Grill
Sponsored by Trinchero Family Estates

Best Chain Hotel Beverage Program
Hilton Hotels
Sponsored by Moet Hennessy USA

Best Chain Multi-Concept Beverage Program
Back Bay Restaurant Group
Sponsored by American Beverage Marketers

Best Chain Overall Program
Walt Disney World Resort
Sponsored by Future Brands LLC

Best Chain Responsible Alcohol Service Training Program
Applebee’s International
Sponsored by the Diamond Sponsors of the Cheers Beverage Conference

Raising the Bar
Patrick Henry, Patrick Henry Creative Promotions
Sponsored by Brown-Forman Beverages

Industry Innovator of the Year
Ann Rogers Tuennerman, Tales of the Cocktail
Sponsored by the Cheers Editorial Team

“We received 110 entries from 47 restaurant chains, a record, and all of them were impressive for their creativity, innovation and impact on sales,” said Cheers Editor Donna Hood Crecca.

The awards program is open to all chain restaurants, defined as an operation with five or more locations in two or more markets. The chain must be in existence for at least three years.

The criteria for these awards are the program’s creativity, originality and impact on the sales and profitability of a full-service restaurant operation. Other factors considered are the level of marketing support, staff training and overall operator commitment to the initiative that lead to its success.

The entries were evaluated by a judging panel that included previous Cheers Awards for Beverage Excellence winners and other leading operators.

For more information about Cheers magazine, the Cheers Beverage Conference, and the Cheers Awards for Beverage Excellence, contact Cheers Editor Donna Hood Crecca, at (631) 265-3839 or email dhc@m2media360.com or visit www.cheersconference.com and www.beveragenet.net.