Doug Martin and Bob Keane, left, and Jack Robertiello, third from right, with the Cheers Awards For Beverage Excellence Winners: Bahama Breeze’s Gary Heckel, Andrea Immer, Drink Chicago’s Tim Griffin, Smoothie King’s Rose Kuhnau, Bennigan’s Tom Benson, Host-Marriott’s Kerri Leer and Bahama Breeze’s Roger Thompson. photography by Todd Buchanon
QUALITY IS BACK!
That’s the message over 200 attendees heard from a variety of foodservice and beverage industry executives and consultants at the Cheers Beverage Conference held in Chicago June 16-17. From praise for the power of ultrapremium, high-profile brands to reports of newly emerging profit centers, the hospitality beverage executives, manufacturers, marketers and consultants found reason to be optimistic.
Kicked off by an invitation-only cocktail party hosted by Cheers, planned by Dale DeGroff of New York’s Rainbow Room and coordinated by Lawrence “Laddie” Weiss of Weiss Foodservice Visions, the conference also hosted the presentation of awards to the winners in the 1998 Cheers Awards for Beverage Excellence competition.
At the conference, Doug Martin, vice president and publisher, Adams Business Media Beverage Group, kicked off the conference with a worldwide perspective that while Coca-Cola (as estimated by Fortune magazine) may sell 1 billion drinks a day, there are “Forty-seven billion drinks a day out there left to sell.”
Pennacchio’s talk, “The Beverage Industry Today: A Snapshot in Time,” reported on consumption trends in the beverage alcohol and non-alcohol segments, based on information found in the Adams Business Media Research Databases.
The key to growth in what is close to a flat or dwindling market, Pennacchio said, is the growth among the more expensive brands. “Popular priced offerings remain under pressure, while superpremium, micro, imported and specialty brews continue to develop and produce share gains,” he said in discussing the beer category.
“The key underlying operative is that while category performance changes over time, and new categories are born along the way, brands remain the soul of the beverage business. A successful, well-positioned brand entry that enjoys an evolving brand personality is often immune to the ebb and flow of a category trend. In a nutshell, people drink and enjoy brands.”
PRODUCT OR DEMAND?
In his keynote presentation, Charles Foster, senior v.p., worldwide development, Carlson’s Restaurants Worldwide picked up where Pennacchio left off, on the growth of ultrapremium and other higher-priced products.
Foster’s talk “Which Came First: Product or Demand?,” explored the growing trend among consumers to drink less while simultaneously upgrading their beverage choices in terms of quality and price. Citing 100% agave tequila, single malt Scotch, small batch bourbons and specialty beers as forerunners of the trend, Foster claimed that for the foreseeable future, “quality, not quantity is the key.”
Some observers have credited the current financial boom in the U.S. and societal pressures to reduce alcohol consumption, as well as the maturing of the baby boomer’s tastes, as components in the growth in quality beverages. Foster cited those, as well as a diversifying culture that wants small but affordable luxuries.
Restaurants, Foster said, are one of the main “third places” where Americans spend their time, after work and home. Restaurant operators now must focus more on customer’s demands for opportunities to socialize, rather than consumption situations and day-part analyses.
Foster said suppliers and operators must take responsibility for marketing beverage products. Suppliers, he said, need to identify their products with the core customers in every restaurant, know each operator’s customers, continuously innovate and examine differences between on-premise and off-premise products and marketing needs.
Operators, said Foster, need to identify core and target customers, pay attention to individual unit performance and fine-tune beverage presentation and merchandising, bar-positioning and glassware quality.
Suppliers need to communicate better with operators and follow up on new product introduction and positioning. Both suppliers and operators need to pay attention to consumer differentiation, as some operations attract consumers who “fuel” while others pull in those looking to celebrate. And all should invest in staff education, on beverages and responsible service. Foster also encouraged more activity against anti-alcohol legislation.
WHAT MAKES A GREAT BAR GREAT?
In the presentation commissioned by Cheers from the Hale Group, Laura McPhail offered details about the essentials of successful bar operations.
As in most businesses, the study found that an operation’s location is key to success. If food is served, the restaurant concept must complement the bar image, and the physical structure must be appealing to the eye, but not overwhelming, McPhail found.
Good bars are successful because they draw customers in with a visually appealing environment; create a focus on the customer, allow staff to build relationships and loyalty with customers, and are focused on defining and nurturing their own uniqueness, she said.
Successful bars are friendly, fun, fast, comfortable and easy, said respondents. Bars must not be intimidating, customers must be acknowledged promptly by servers, and a good selection of brands should be available.
The ideal server has personality and is outgoing, efficient, knowledgeable and fast. These attributes, McPhail said, are more important in a server than skill, accuracy, empathy and approachability. “Great servers build customer loyalty, which leads to profits and growth,” she said.
However, good servers don’t always make good bartenders. Operators need to recruit bartenders who should be treated as professionals and be allowed to build relationships with customers.
Customers, McPhail warned, are schizophrenic in their desires; they simultaneously want something new and something familiar. “How do you combat this? Offer exciting brands, match drinks with your concept, differentiate yourself with some specialty and offer broad price ranges and varieties within categories,” McPhail said.
In wine, by-the-glass selections and flights are popular among operators, who said server and bartender interaction with customers is crucial to improve sales.
The survey also found that there should be pricing parity between house wines, draft beer and well spirits at the low end of the range. Customers need a number of price “step-ups,” which should fit the concept and food menu.
The study, based on interviews with food and beverage directors, bar managers, wine stewards and bartenders, included the casual, upscale and hotel segments, with 75% representatives of multi-unit operations.
MARTINIS AND MORE
Can the cocktail revolution continue? The answer was a resounding “Yes,” according to the first of three panels held during the conference.
Moderated by consultant Tim Johnson, the panel included Mikie Baker of the Baker Agency; George Miliotes, California Grill at Walt Disney World’s Contemporary Resort Hotel, Orlando; Gary Heckel, Bahama Breeze, Orlando; Paul Khoury, PB&J Restaurants, K.C., MO; and Mark Flom, Apple South, Madison, GA.
Panelists generally concurred that the upsurge in consumer interest in higher-priced brands could be maintained, but that demand for better presentation, quality and product knowledge would be correspondingly greater.
At Disney, said Miliotes, managers develop what they call the “perfect guest experience,” a description of an ideal transaction that satisfies a customer. “We build alcohol selling into that experience,” he said. By hiring happy and smart people, encouraging them to “up-sell” and provide a compelling reason to do so, Miliotes provides impetus for routine salesmanship.
Bahama Breeze eliminates the need for an initial up-sell by making all beverages with branded spirits, said Heckel.
Khoury differentiates operations by altering garnishes and recipes, and employing signature glassware. “At Yahoos and YaYa’s, cocktails are served differently. At Yahoos you get a Bloody Mary with a beef jerky garnish; at Ya-Ya’s, it’s served with a pepperoni stick.”
GET YOUR JUICES GOING
While the main focus of the day was beverage alcohol, the Cheers Beverage Conference didn’t neglect the booming non-alcohol segment.
In 1995, according to moderator Rozanne Gold, culinary director, Joseph Baum & Michael Whiteman Co., New York, smoothies, teas, coffees, new age beverages, sports drinks and the like accounted for $2 billion in sales and are expected to surpass beer by 2002.
Panelist Edward Apffel, Diedrich Coffee, said that while the coffee segment has given the appearance of a boom, consumption in the U.S. continues down. But the quality of the coffee and consumer willingness to pay more has risen. It makes coffee one of what Gold termed “magic foods” that garner high interest and sales while maintaining low food cost.
So, said Rose Kuhnau, Smoothie King, do smoothies “We are selling health at a 20% food cost.” Henry Patterson said an upscale tea he sells for $15 per pound can yield 100 pots served for $3 or $4.
Gold made ten predictions; convenience store vending of these beverages; upscale operations adopting flavors like raspberry tea; smoothies becoming ubiquitous; herbal hot and frozen chocolate; lemonades become big; more global flavor ideas; more interest in obscure beverages; growth in fresh fruit milk shakes; success of beverages like Yerba Mate’; and addition of beverage alcohol to the new drinks.