Technomic has raised its projections for away-from-home alcohol sales for 2010, based on a small uptick in traffic at restaurants and bars.
Consumers still will trade down from the priciest bottles of wine and top-shelf liquors when they return to dining out, officials of the Chicago-based research firm said, but Technomic now expects total alcohol sales to grow 1.1 percent in 2010. At the end of 2009, the firm had anticipated a decline of 2.5 percent in alcohol sales for this year.
“Our expectations for segments like casual dining, fine dining and bars are much higher than they were six months ago,” said David Henkes, vice president and director of Technomic’s on-premise practice. “Consumers are returning to restaurants, and that’s good news for the sales of alcohol and related products.”
Experts expect wine sales to lag behind the small growth of beer and spirits sales. Technomic projected growth of 1.2 percent for beer sales and 1.6 percent for spirits. Wine sales are expected to fall 0.6 percent for 2010, based on the lingering trend of consumers opting for less expensive bottles of wine or drinking it by the glass instead of ordering bottles.
Such recession-chic trends have spurred some restaurant chains to upgrade their house wines to selections with lower price points but still-acceptable profit margins or, for a select few, to introduce private-label wines. Maggiano’s Little Italy and P.F. Chang’s China Bistro recently joined Ruth’s Chris Steak House in offering private-label wines.
Henkes and Technomic said orders of house wine increased as consumers began feeling more cash-strapped, rising to 49 percent of wine occasions in the fourth quarter of 2009 compared with 43 percent in the year-earlier fourth quarter.
One casual-dining company, Buca di Beppo, plans to develop more alcoholic drinks as sales drivers, particularly cocktails.
“We’re focusing a lot more on booze,” said Robert Earl, founder and chairman of Planet Hollywood International, parent company of Buca di Beppo. “We’ve started to introduce some great cocktails, and the challenge is to get the client interested in those while maintaining their wine consumption.”
Buca’s summer drink specials include draft beers in free collectable glassware, as well as White Sangria, a Pomegranate Margarita and a Wildberry Mojito.
Technomic projected a 0.5-percent decline in alcohol sales at casual-dining restaurants this year but was more bullish on booze in other segments. Among the more optimistic predictions were increases in alcohol sales of 2.1 percent at bars and nightclubs and casinos, 1.3 percent at lodging and concession outlets, and 1.1 percent at fine-dining restaurants.
Stressing that the restaurant industry overall still has a long way to go to rebound completely from the recession, Henkes said operators should focus on bar programs as a vehicle for growing sales, even if increases in sales of alcohol are expected to lag slightly behind growth of broader foodservice sales.
“While it’s good news that we’re starting to see growth after nearly two years of declines, the industry is not out of dangerous territory yet, and the recovery isn’t as robust as it has been in previous recessions,” Henkes said.
Contact Mark Brandau at [email protected].