Classic domestic beers as well as niche and widely distributed craft beers are leading the way in this popular category. As the old adage states, people enjoy a drink to celebrate when stocks are booming, and to console themselves when the market is down. But what are guests consuming in this current economy?
These days, large production domestic brews are seeing a revival at restaurant and bars, as patrons appreciate their lower price points as a wallet-friendly way to support the home team. The United States also continues to produce an ever more interesting array of unique regional and artisanal beers, which tap into a “drink local” movement similar to what’s happening at restaurant tables. We examine how sales of domestic macro beers have remained steady during these rocky times and how operators’ guests interest in unique flavors and a product’s place of origin have actually boosted sales of craft brews.
According to the Beverage Information Group, Cheers’ parent company, non-craft domestic beer sales in 2010 were down 2.3 percent from 2009, the top four leading on-premise beer brands consumed are all domestic giants. Bud Light, Budweiser, Coors Light, Miller Lite and Natural Light remained the market leaders.
“Domestic beer has always been a strong factor in total beer sales. Its sales have stayed constant and are an important part of our beer business,” says Marc Sachs, former director of hospitality and beverage for Salvatore’s, a four-chain operation of Italian restaurants based in the Boston area. Salvatore’s top selling domestic beers are drafts and bottles of Coors Light and bottles of Bud Light, Miller Lite, Budweiser and Michelob Ultra. Domestic drafts are approachably priced at $3.50 per pint and $4 per bottle. Beer accounts for thirty percent of alcohol beverage sales, and within that figure, domestic sales account for thirty-five percent.
Solid Sales Figures
Nora Evans, service coordinator for Cool Hand Luke’s Steakhouse and Saloon headquartered in Fresno, California with ten locations in California and Idaho, agrees with domestic beers’ constancy. “For us, it never went away. Being a Western-themed steakhouse, I believe that a lot of our clientele in most of our locations hold pretty loyal to their traditional brands.” Across the board, Cool Hand Luke’s top sellers are always drafts of Coors Light and Bud Light, sold for $4 a pint and $5 for twenty-five ounces.
Greg Engert, beer director for the Arlington, Virginia-based Neighborhood Restaurant Group, also sees strong sales of domestic mass-produced beers, especially light styles made by Miller, Budweiser and Coors, at several of the NRG’s twelve venues, including EatBar and Columbia Firehouse. (Beer-centric ChurchKey and Birch & Barley carry 535, but neither domestic nor imported macro brews are on the menu.)
However, Engert also notes that Blue Moon Belgian White, the mass-produced Belgian-style unfiltered witbier crafted with coriander and orange peel and typically served with an orange wedge, is also a popular seller at several NRG venues. Though its perception is that of a craft beer made by the Blue Moon Brewing Company, the brand is actually owned by MillerCoors. But, Blue Moon has ridden the wave of craft beers’ increasing popularity, and its association with the sub-category has seen its sales rise from six-tenths of a percent in 2006, to one and three tenths of a percent in 2009.
At Cool Hand Luke’s California locations, Evans notes that Blue Moon is also a top seller, as well as Shock Top, a similar product made by Anheuser-Busch. The distinctive appearances and flavor profiles of these two products as well as their approachable price points make them attractive in the current economy, as customers can enjoy a seemingly artisanal beer at a macro beer price.
Craft on the Rise
As the economy improves, Engert predicts an increase in the number of beer drinkers who will be shifting from mass-produced domestic beers to craft offerings. The Pennsylvania-brewed Yuengling Traditional Lager currently leads the on-premise craft market share with 16.6 percent, though that number is down 1.8 percent from 2006.
Engert clearly witnesses this “drink local” influence. “I am seeing guests shift to craft by shifting to local craft beer.” To reiterate the sports metaphor: it’s easy, it makes sense, and is probably cost-effective to be a loyal superfan when the home team plays right down the street. Engert points out that Washington, D.C. and Northern Virginia have seen the recent arrival of three new breweries, with more on the way (including plans for one that will be launched by Engert and the Neighborhood Restaurant Group.)
Existing in the same town as the largest American-owned beer company in the country also helps boost sales of local brews. “Being located in Massachusetts, we have a long term, mutually beneficial relationship with the Boston Beer Company and Samuel Adams brands,” explains Sachs. “We also encourage smaller local breweries to be part of our beer program.”
Twenty-somethings have come of age accustomed to a readily available assortment of domestic and craft beers with a wide variety of flavor profiles. At Applebee’s, the largest casual chain restaurant in the world with one thousand locations in forty-nine states, regional and artisanal beers appeal to the younger generation’s willingness to experiment.
Big Flavors, New Brands
Beverage senior manager Brian Masilionis say these guests are “drinking fuller-flavored craft beers, as they tend to experiment more with rich, robust and unique flavors.” Beer choices at Applebee’s are selected with input from individual locations, to incorporate local favorites. He does go on to point out that at Applebee’s (as well as at many other venues), these smaller batch beer brands are priced higher than mass-produced brews and usually aren’t discounted as part of a promotion or special. Nonetheless, their popularity is on the upswing. “Applebee’s is a neighborhood grill and bar so we offer local beers that guests love,” says Masilionis.
In addition to the popularity of more niche craft brands like Allagash White from Maine, Brooklyn Lager and Belle’s Two Hearted Ale from Michigan, Engert says NRG locations sell a fair share of Sierra Nevada Pale Ale and the company’s seasonal brews. Sierra Nevada Pale Ale is the third biggest selling on-premise craft beer in the country, with 4.4 percent of the market. Evans notes that Northern California locations of Cool Hand Luke’s are big Sierra Nevada sellers since the brewery is located close by.
No matter if a brew is produced on a large scale or a smaller one, ongoing marketing efforts definitely help to augment sales. Currently Cool Hand Luke’s is tapping into guests’ feelings of nostalgia with much-appreciated throwback prices. At their Clovis, California location, management currently has a promotion with Pabst Blue Ribbon on Wednesday evenings, where pints cost $1 and twenty-five ounce pours cost $2. “That has drawn a lot of business, and the older clientele are enjoying seeing a comeback of something they used to drink ‘back in the day,’ notes Evans.
Domestic beer is visible and widely available. Consumption of macro beers and widely distributed craft beers makes sense from an economic standpoint and brand loyalty and interest in local, unique artisanal beers add to their appeal. As Evans succinctly puts it, “Domestic beer just always seems to sell itself. It has such a loyal consumer base that I don’t foresee it dying in sales, at least not in our concepts, any time soon.”