Ai Insite – Fast Food Restaurants Add Alcohol to the Menu

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Fast Food Restaurants Add Alcohol to the Menu

Some fast food restaurants have added alcohol to their menus in an effort to spike business.
Burger King, Starbucks, and SONIC Drive-In are a few of the restaurants that have started or will start selling alcoholic beverages at select locations.

The move to serve booze comes as limited service restaurants, which include quick-service and fast-casual establishments, face a tough economy and rising food costs. Many fast-food joints are looking to pull people into their locations during typically slower evenings. The quick-service restaurants are also seeking to compete with fast-casual and sit-down restaurants that serve adult beverages.
“The limited service market has become more competitive,” says Darren Tristano, executive vice president of restaurant consulting firm Technomic Inc. “The fast-casual segment is growing and restaurants are trying to tap into the young adult market.”

As part of their SONIC Beach concept, SONIC started selling beer and wine at two south Florida locations this summer. Famous for its carhop service, the restaurants will not serve alcohol to anyone who orders in their car.

SONIC follows Burger King, which recently opened “Whopper Bars” in Miami, Las Vegas, and Kansas City to serve beer.

Last fall, Starbucks started serving regional beer and wine at Seattle locations. With Starbucks in the United States getting 70% of its business before 2 p.m., the coffee chain is targeting evening crowds while attempting to become part of the neighborhood.
“I think the consumers have shown the industry they are willing to pay more,” Tristano says. “Some fast-casual chains are producing strong revenues and higher profit margins, so quick-service are adopting their methods to compete.”

In light of the competition coming from the fast-casual market, Tristano says it is no surprise that many of the quick-service chains are seeking to become more sophisticated. However, he does say there are risks that come from adding alcohol to the mix.

“SONIC is a little more surprising than the others because they are mainly a drive-in, and serving alcohol could encourage drunk driving and disorderly conduct,” he says.

Larry Canepa, a chef instructor in the Culinary program at The Art Institute of Phoenix, agrees the risks may outweigh the rewards for some choosing to serve alcohol. He also says there are restaurant management issues that need to be taken into consideration.

“I think [serving alcohol] will present some challenges,” he says. “What about training staff to sell and serve alcohol? The training has to be extensive and you may have young people who aren’t old enough to drink serving alcohol.”

He also says serving alcohol may take some of the fast out of fast food.
“They will be adding another thing that could cut into the 90-second food delivery,” Canepa says.
Tristano says the trend might be providing consumers with more options than they are looking for from their fast food restaurants.

“We believe consumers give restaurants permission for the types of beverages they sell,” he says. “They may find it easier if they don’t try to appeal to everybody, especially given the ramifications of serving alcohol at their restaurants.”

Ramifications include issues concerning permits and liquor licensing, underage drinking, and alcohol-related altercations and accidents. Many fast-food restaurants have a reputation for being family-oriented and safe places. Some are worried that fast food and alcohol not only sends the wrong message to kids, but may contribute to the obesity epidemic.

Although most of the chains are just testing the waters, Canepa says many should be cautious of jumping the booze bandwagon.

“I have always been somebody who believes restaurants should stay true to their concept and their mission statements,” he says. “Most of these restaurants already have solid reputations. Stick to what you do best.”
Sticking to their kid-friendly theme and not putting their reputation on the line, McDonald’s restaurants in the United States have yet to pursue alcoholic beverage sales. Instead, they are staying competitive by going the specialty beverage route, offering a variety of coffee drinks, frappes, and smoothies that cost more than fountain drinks.

Tristano says serving alcohol usually works for some restaurant categories better than others.
“For Mexican and Asian food, it would work, and some burger chains would also do well serving alcohol,” he says.

View the full article on Ai InSite

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