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2012 Forecast: Increase In Restaurant Alcohol Sales

Restaurants and bars can anticipate better times in terms of alcohol sales, as Technomic forecasts higher revenues for alcoholic beverages in the year 2012.

A new research conducted by Technomic revealed that the foodservice industry can see satisfactory growth in alcohol sales next year, with drivers of that growth being premium offerings and higher beverage prices. It also forecasts that overall alcohol sales in restaurants should rise by 2.4%, with an assumption for possible inflation at 2.5%. Factors that helped to encourage expectations are the gradually improving statistics of customer traffic and the restaurant operators’ anticipation of a better 2012.

“The underlying upturn of revenues in restaurants and bars still remain to be vulnerable, but we’re beginning to see restaurant consumers return to their usual habit of having a drink or two while they’re dining out,” said David Henkes, Technomic’s vice president and director of on-premise practice. “Wine sales are positioned to have the strongest increase, while spirit and beer sales see a slightly lower growth. While it would take some time before we see the industry’s full recovery, it is nice to watch things slowly moving towards a better direction.”

“But then again, alcohol sales will still lag behind larger bar and restaurant sales,” Henkes added. “The actual volume (or quantity) of alcohol products used up in establishments next year is predicted to still remain flat, as compared to alcohol performance in 2011.”

On a per segment breakdown, the report forecasts the fine dining alcohol sales growth at 3.5%, while casual dining is predicted at 3.2%. In terms of types of beverage, the forecast includes:

• Wine : 3.5%

• Beer : 2.2%

• Spirits : 2.3%

• Overall on-premise : 2.4%

“The expected sales growth is driven primarily by price increases and through profits gained in top-quality alcohol categories, like premium spirits and craft beers,” he said. “Bar and restaurant operators, in their cool, quality restaurant uniforms, should continue to improve their whole beverage program. Sales are beginning to budge forward, and as restaurateurs seek differentiation from the rest; their beverage program ought to play a vast role.”

Bar managers in smart restaurant uniforms have been used to raising their beverage prices, noting that their bosses customarily depend on alcohol sales as one of the ways to boost their restaurant’s profits. “But some of these bar professionals are now starting to push back,” added Henkes. “Many of them now intend to look at many ways to augment profitability, or at least are able to maintain it, as an increase in alcoholic prices may not be an option.”

In a survey done on some bar and restaurant managers, most of these operators say they try to protect their profit margins by reducing their pour sizes for beer and wine, and by using lesser quantities of spirits in their mixed drinks. 20% said they reduced their draft beer pours as against last year’s 13%; while 19% said they did the same with their wine pours, as opposed to 14% last year. 18% said they now use reduced spirits in mixed drinks, twice the amount of last year’s percentage, which is only 9%.