Restaurants could get more expensive in 2017: here are 3 ways to save when you dine out

January 11, 2017

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By James Dennin
https://mic.com/articles/164756/restaurants-could-get-more-expensive-in-2017-here-are-3-ways-to-save-when-you-dine-out#.gIsHHUZAZ 

Time to break out Dad’s old cookbooks: Restaurants are likely to get more expensive in 2017.

For one, a wave of state-level minimum-wage hikes across the country could make labor more expensive — which could prompt restaurants to raise their prices by as much as 5% in 2017, Darren Tristano, CEO of food industry analysis firm Technomic, told CNBC.

That’s roughly double the typical inflation-driven annual hikes of 2-2.5%, he said.

What’s more, there are pressures beyond minimum wage laws pushing U.S. restaurants to pay workers more: The number of eateries has grown since 2009, according to Thrillist, while the number of immigrant restaurant workers has fallen. Those workers therefore have more bargaining power over pay.

If establishments then pass higher costs to patrons, the price of dining out could eat up even more of your paycheck.

Millennials in the United States already spend an average of $103 a month eating out, according to a 2016 survey from TD Bank. (If you live in an expensive city like New York or San Francisco, that figure might make you lol.)

Regardless of where you live, one obvious way to be thriftier this year is to cut down on big-spender nights full of surf and turf. But realistically, no matter how hard you try, you’ll inevitably end up dropping cash on date nights, celebratory toasts — and the unavoidable best friend’s birthday dinner.

So here are a few ways to treat yourself without breaking the bank.

1. Go out to lunch instead of dinner — and ditch dessert
Research shows restaurants face harsher competition for nighttime diners than they do during the day, which often prompts them to offer the same exact dishes for cheaper.

At Jean-Georges in New York City, for instance, the difference is stark: Three courses plus dessert will set you back $84 at lunchtime, while the same offering at dinner is $118.

Beyond that?

The easiest way to save money on a restaurant meal is to abstain from the little extras, like the fried appetizer or that delicious — but unnecessary — lava cake.

Indeed, one of the most effective ways to cut costs while eating out is eliminating dessert, Steve Dublanica, author of industry tell-all Waiter Rant told Real Simple.

That’s because many restaurants outsource dessert production to another bakery and then jack up the price. No point in paying premium for a frozen dessert, especially if there’s an ice-cream parlor or bakery on the way home.

2. BYOB, especially wine
Many personal finance guides recommend the extremely restrained practice of ordering a glass of water with your meal: Water, unlike other beverages, often comes with the meal gratis.

Seriously, don’t roll your eyes.

Industry journals actually recommend restaurants mark up booze between four and five times, depending on other costs and your desired profit margin.

That means that a middling $10 bottle of wine will set you back $40 or even $50 if you want to drink it in a restaurant.

Womp womp.

If washing down your steak with water seems a bit spartan, consider finding restaurants nearby that allow you to bring your own beverage.

OpenTable and FourSquare both have categories for these dining options, although corkage fees apply, usually between $10 and $20.

Still, at $15 for a five-liter box of Franzia — which works out to roughly $2.25 per traditional 750-milliliter bottle — will more than make up pulling the trigger on that third course.

Too much of a snob for that two-buck Chuck? Here are some cheap-but-not-horrifying options from $6 to $27.

3. Ditch brunch — it’s not worth it
Savvy industry types say clocking your meal in terms of total dollars and cents spent is the wrong way to go about it.

After all, that 32-ounce ribeye may be pricier than a sensible bowl of pasta, but the ribeye cost the restaurant a lot more money to buy in the first place — and the pasta is likely to be marked up way more than it’s worth.

There are other factors to consider when dining out.

If you’re in a steakhouse, your order may have benefitted from an aging cellar or other fancy treatment that makes the steak taste better than what you could make at home: So you are arguably getting decent value — and are wasting your cash on that sad “garden salad.”

This line of thinking holds that if you’re going to eat out at all, you might as well spend a little extra on the things that actually make a restaurant meal special as opposed to foods you can just make yourself.

On that score?

It might be time to break up with your most insufferable millennial pastime, brunch. The meal is replete with cheap foods like eggs and pancakes — both of which you can prepare far more inexpensively at home.

At the very least, it’s a good excuse to finally learn to make that bacon-and-egg breakfast poutine.

 


Why new sports bars are blitzing Dallas for a piece of the action

September 28, 2016

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By Karen Robinson-Jacobs
http://www.dallasnews.com/business/restaurants/2016/09/21/sports-bar-operators-look-gain-yardage-north-texas

When The Park, a small sports bar chain, began looking to expand beyond its Austin birthplace, it bypassed Houston and headed straight for Big D.

With its confluence of marquee sports teams across every major league and its never-say-die fans, North Texas has become a magnet for game-focused restaurant chains and independents.

All are hoping to score.

“I don’t think there’s a better sports town anywhere in the country than the Dallas-Fort Worth area,” said Eric Dunahoe, director of operations for The Park, which hopes to open a North Texas location — its first outside of Austin — by late 2017. “If we’re going to be the Texas-owned-and-operated sports bar, we need to be in the city within the state of Texas that’s the best sports town and that’s Dallas.”

The sports bar occupies a unique, if amorphous, niche within the casual dining segment.

There’s no strict definition of what makes sports bars. Generally, they include TV-festooned venues where more than 40 percent of sales come from alcohol and the draw is the love of the game. (Think Buffalo Wild Wings, Dave & Buster’s and Twin Peaks.)

The growth of sports bars — both in number and in sales might — comes as the broader casual dining segment has struggled.

Chicago-based Technomic tracks sales at the Top 500 U.S. restaurant chains. In the 2015 list, about 13 percent of casual dining sales were at “sports bar” concepts.

Sales at sports bars on the Top 500 list grew 7.7 percent in 2015 to $7.3 billion, compared with 2.9 percent sales growth for the broader “varied menu” category, Technomic said.

The top sports bar chains grew their location count by 4.6 percent in 2015 while major full-service chains overall grew at a rate of 0.9 percent.

“I would say this is a fast-growing niche in the full-service industry,” said Technomic president Darren Tristano. “Although independents place higher emphasis on food quality, the chains tend to have the largest consumer attraction due to the size of the locations, variety of adult beverages, affordability of shareable food, comfortable seating and availability of televisions to view a variety of sports.”

North Texas is one of about a dozen U.S. markets with all four major sports leagues — NFL, NBA, NHL and MLB — along with soccer and numerous alums from powerhouse college programs.

And it’s increasingly a draw for migrants from other major sports towns, who bring their viewing loyalties with them.

That makes North Texas fertile ground for expansion-minded sports bar operators.

It’s also home base for several of the major chains including Twin Peaks, Boston’s and Dave & Buster’s.

Dave & Buster’s was born in Dallas in 1982 as a hybrid restaurant/playground that enticed guests to “Eat. Drink. Play,” with a focus on food and electronic games. In 2011, the Dallas-based chain added “Watch,” as part of a full-court-press designed to include a branded “D&B Sports” area near the restaurant bar.

Today, all 86 U.S. Dave & Buster’s locations include amped-up “sports viewing packages.” About 80 percent are officially branded with D&B Sports sections that bring the restaurant TV screen count up to about 40 (compared with 20 pre-sports push).

That includes two or three 180-inch screens, according to Sean Gleason, chief marketing officer for Dave & Buster’s.

The sports theme has helped Dave & Buster’s appeal to millennials, who gravitate to the communal dining spaces and party-like atmosphere.

On a recent football Sunday, manager Don McDougall presided over the dimly lit but highly animated scene at the Dave & Buster’s on Central Expressway — a restaurant that promises the “ultimate sports watching experience.”

The bar shows every NFL game on Sunday.

As the Cowboys battled the New York Giants, the chatter among the sports fans was constant. A taunt here, a high-five-punctuated boast there. Cheers and groans were interrupted by the occasional “Over here” as patrons vied for attention from a worker lobbing Dave & Buster’s T-shirts into the crowd.

“We try to make it just like tailgating, with prizes, a T-shirt cannon,” said McDougall of the 4-year-old location. “We try to make it as close to being at an actual game as possible.”

Near the center of the bar area, Brad Cotton, 33, and his wife Donna, 42, of DeSoto said they can be found at a sports bar any given Sunday, unless family members are hosting a watch party.

“Going to the game is a little expensive,” said Brad, who was wearing a No. 82 Jason Witten jersey. “So that’s once a year if we do that. This is affordable, but you’re still around die-hard fans. You want to be in the atmosphere with other fans, that’s going to turn up like you turn up.”

Donna noted that the uniform of the day was predominantly blue and white.

“When we walk through the door, just because we have Cowboys gear on, everybody becomes friends,” she said. “That’s pretty cool.”

None of the sports fans interviewed were surprised that North Texas is home to a growing sports bar scene.

“Sports are big in North Texas, whether it’s NASCAR [or] football,” said Daryl Hope, 47, who is moving soon from Forest Hill to Rockwall.

Hope prefers his perch at Dave & Buster’s to stadium seating because it allows him to watch multiple games at once.

That’s important, he said, since he’s big into fantasy football. Try 14 leagues big.

The introduction of fantasy football to younger consumers and mainstream consumers, including women, has given the sports bar segment a nice lift, Tristano said.

Despite the fan enthusiasm, North Texas remains a challenging market as operators compete for both consumers and investors.

In 2000, when the Canadian-based pizza and sports bar chain Boston Pizza began investing in a U.S. expansion, it headed straight for North Texas. The U.S. headquarters is in Dallas and a corporate restaurant that doubles as a training center is in Irving along busy Interstate 635.

Three more franchised locations were added locally through 2007. Then the company was hit with a blitz known as the great recession. From about 60 U.S. locations, the brand dropped to about 25. No additional locations have opened in North Texas in the past 9 years.

Nationally, the brand gained some yardage and is now back up to 29 locations. And while the company has found a franchisee to grow in West Texas — two locations will open in El Paso next year — the company has yet to find the right local combination of investor and real estate for North Texas.

“There’s lots of competition,” said Ken Phipps, director of franchise development for Boston’s Restaurant & Sports Bar, the U.S. arm, as the lunch bunch watched highlights from the weekend’s sports matchups.

North Texas “is and will remain one of our target markets to find the right franchise partners to help us grow.”

“It’s a very expensive market as far as real estate,” he added. “It retained its real estate value post-2008, and it’s gone nothing but skyward. Especially locations like Frisco, Plano, Arlington, with all of the new big developments like the Cowboys’ The Star.”

Three different franchisees own the three noncorporate D-FW locations. Now the company, like many major chains, is looking for large investors who can open more than one location.

“It’s a big investment,” he said, “We look for a net worth of $1.5 to $2 million and liquidity of $500,000.”

“We really want to grow our D-FW market,” said the North Texas native. “It’s our home. It’s our backyard for the U.S., and if we find the right partners we could easily add 15 restaurants in the next five years. This market can easily handle that.

“I’m grinning about the opportunities here in Texas,” he added, after showing off the restaurant’s 160-inch drop-down screen. “It’s very exciting.”


World of Beer to open taverns in China this year, India and the Philippines are next

February 17, 2016
Justine Griffin, Times Staff Writer
Tampa Bay Times
Thursday, February 11, 2016
http://www.tampabay.com/news/business/retail/world-of-beer-to-open-taverns-in-china-this-year-india-and-the-philippines/2265064

Paul Avery, CEO of Tampa-based World of Beer, is pushing the craft beer tavern chain into new international markets this year. 
[Photo courtesy of World of Beer]World of Beer is about to become an international brand.

This year the Tampa-based tavern chain known for its extensive craft beer offerings will open its first overseas bar in Shanghai, CEO Paul Avery said. After that, World of Beer is headed to India and the Philippines. For Avery, a 20-year veteran of the Outback Steakhouse chain, the move to open franchisee-owned taverns overseas is the next logical step for the brand’s growth.

“I am very confident that World of Beer will do well in international markets,” Avery said. “Craft beer is already there. But no one out there offers what we do.”

Americans like to think that beer is solely a yellow, bubbly beverage born in the United States, thanks to brands like Budweiser and Coors, said Brian Connors with Connors Davis Hospitality, a global food and beverage consulting firm in Fort Lauderdale. But every country has a beer culture, he said.

“What you’re seeing is this globalization of American concepts that are flourishing overseas. World of Beer isn’t the first, but it’s part of this wave of fast casual restaurants and gastropubs that are popping up in new markets,” Connors said. “Beer is globally accepted. It’s a good move.”

Avery, 56, joined World of Beer as the company’s CEO in January 2013 when he bought a controlling interest for an undisclosed price. In just three years, World of Beer hardly looks like it did when it launched in 2007. The bar now offers an array of craft cocktails. The footprint is nearly double in size. And most of the taverns serve food.

The 6,000-square-foot World of Beer that opened in September on Fowler Avenue near the University of South Florida offers an open-air bar atmosphere and its own kitchen. It represents what many World of Beer locations will look like soon, Avery said. And when the World of Beer in West Shore’s Avion Park opens in May, it will have a two-story patio called “the flight deck.”

“The taverns that don’t have kitchens yet will get them soon. We’re working on converting all of them,” he said.

Just don’t call World of Beer a restaurant.

“The focus is still on craft beer,” Avery said. “But we knew we had to expand what we offered in order for this to be sustainable. We think the new food menu and craft cocktails only broaden our appeal.”

Restaurant analysts agree.

“The pub experience is one for social gathering that just so happens to have great food and great cocktails,” Connors said. “It’s a smart move by World of Beer, and I think a lot of what’s behind it is millennial-driven. Even at a chain, consumers look for that authentic beer and food experience these days.”

There’s a lot competition, too, in the craft beer market. In Tampa Bay alone, World of Beer competes directly with another craft beer bar chain, the Brass Tap; local brewpubs; and a slew of restaurants that sell craft and locally brewed beer. That’s not to mention the dozens of local breweries that have started up on both sides of the bay.

“As high-quality craft beer has grown and can be found in most bars and restaurants, competition is heating up and the pressure to deliver a better and more unique experience is more pressing,” said Darren Tristano, president of Technomic, a Chicago food research firm. “Their strategy appears to be putting them on track to satisfying a more broad-based consumer occasion set by expanding to food and cocktails.”

World of Beer has 77 locations in 19 states, including taverns in Manhattan and Kentucky, which opened last year. Of those, 14 are company owned and the rest are owned by franchisees. Avery said World of Beer will open 35 new restaurants this year, including at least one of the three planned for overseas in Shanghai.

The goal is to grow the number of company-owned stores to 30 percent, Avery said.

“It’s a great investment for our shareholders, and it makes us a better franchiser when we know what the day-to-day operations are like,” he said.


Bootler brings comparison shopping to food delivery services

February 3, 2016
Cheryl V. Jackson
Blue Sky Innovation
Chicago Tribune
January 26, 2016
http://www.chicagotribune.com/bluesky/originals/ct-bootler-food-delivery-bsi-20160126-story.html

Food deliveryA Chicago startup plans to feed on the food-delivery boom with a search engine that makes comparing costs and delivery times easier.

Bootler (at gobootler.com) launches Tuesday in Chicago with a platform that allows users to compare menu items, prices, delivery times and fees, and order minimums across a variety of services. Users can add booze to their orders through the company’s partnership with on-demand alcohol delivery service Saucey.

Founder Michael DiBenedetto says customers who use Bootler don’t have to hop from one delivery site to the next to find what they want, then evaluate costs and other information.

The site currently includes Delivery.com, GrubHub, DoorDash, Postmates and EatStreet, with plans to add Uber, Amazon, Caviar and Eat24.

“It’s a very saturated market,” DiBenedetto said.”We think it will work because of how many companies are in the space. We’re driving more awareness and traffic for all the players in the space by arranging them all in one spot.”

Users can search by restaurant or food category then see the total from various delivery services, including menu price, taxes and delivery fees. They can then click through to their preferred service to complete the order.

Using Bootler is free to consumers. The company plans to get a cut of the delivery services’ take.

One-stop shopping for online food and alcohol ordering seems a natural with the growth of restaurant delivery services, said Darren Tristano, president at research and consultant firm Technomic.

“It was only a matter of time before somebody built a site that makes comparisons,” Tristano said. “It makes sense. We’ve seen it in other types of comparative places like with travel, with airfares and hotels and car rentals.”

It could be difficult to get consumers who already order from particular sites to steer first to an aggregator, though, Tristano said.

It “will be interesting to see if they can get consumers for a few dollars’ or a few minutes’ savings,” he said.

DiBenedetto said he started working on the website in June.

“I’ve wanted to order from one restaurant and it didn’t have what I wanted, so you end up having three or four tabs open until you find one that delivers what you want,” he said.

The site began operating beta in December, he said.


Cold Fusion

January 9, 2014

2014-01-09_1101In an exercise that captured the attention of category managers attending CSP’s Cold Vault Summit, consultant and former retailer Casey McKenzie of Lexington, Ky.-based Impact 21 Group asked the retailers to consider where they would place products in a fictional convenience store.

While the specific results didn’t matter—“There is no right or wrong answer,” McKenzie said— the real message was in the variety of answers.

While one group placed beer in the back-corner cold-vault doors across from a beef-jerky endcap, another put dairy in the same corner doors with bread and other grocery basics nearby. “We imagined our store was in the Northeast, where c-stores really evolved out of the dairy business,” explained the team’s leader, Nancy Knott, category manager of alcohol for La Palma, Calif.-based BP ampm. In that region, she reasoned, consumers are still drawn by bread, milk and eggs.

“That’s it!” McKenzie said. “This exercise is not just about product placement and adjacencies; it’s about what your marketing objectives are. Much of it is driven by who your customers are and what you want to be. But it can’t all be pie-in-the-sky stuff; there has to be some science behind it.”

For three days, 35 retailers from across the country put on their proverbial lab coats to consider the science and the data driving beverage sales today. Their scientific method started with a big picture: the economy and,
perhaps more important, how consumers view it.

“I think the economy is in a lot better shape than [most] people do,” said analyst Nik Modi, who follows beverage and tobacco stocks for RBC Capital Markets. Modi said the housing market is improving, U.S. gross-domestic product is growing again and the job picture is showing some progress.

Despite that, 10 of 12 major beverage categories are slowing and the majority of food categories are declining, according to Modi.

This is a matter of psychology and how consumers think about their purchases. “The internal consumer is being squeezed,” forcing them to be more disciplined in their spending, meaning less discretionary spending
on things such as beverages and fast food, he said. “Consumers are making choices.”

Also, as spending on cars and housing have increased this year, retail sales have declined.

Calorie Concerns
Meanwhile, the continuing trend toward healthier eating also has taken a toll in more ways than one.

First, there’s the move away from products—full-calorie sodas and juices—viewed as adding to the obesity epidemic in the United States.

But the real surprise is that even diet drinks, particularly low-calorie carbonated soft drinks, are hurting, indicating the next phase in the continuing move away from the CSD category.

“It comes down to health and wellness,” Modi said. Consumers are hearing a lot of negative news about low-calorie sweeteners, particularly aspartame, that’s turning them away from the category.

“Just as consumer interest in aspartame peaked (in the first quarter of 2013), diet CSD trends began to worsen, while regular CSD trends remained,” he said. “There are a lot of companies out there chasing the lowcalorie trend. I’m not sure it’s as important today as it used to be.”

For c-stores, those more indulgent beverages are still an area of growth. “Seventy percent of what I sell in my stores have nothing to do with health and wellness,” said retailer Lundy Edwards of Forward Corp., Standish, Mich.

Still, Modi and others pointed out, the trend suggests these full-calorie categories are falling out of favor with the public.

Ivan Alvarado, director of category management for Plano, Texas-based Dr Pepper Snapple Group, acknowledged that in just the past year, the average CSD set has shrunk from 14 shelves to nine in c-stores, most of it claimed by energy drinks and bottled water. “Some of this is related to health and wellness, and some of it is self-infl icted,” he said, citing beverage makers’ hesitance to innovate, and that “CSDs have not been able to communicate with millennials. New tactics are needed to reach these consumers.”

Added Clinton McKinney, group director category advisory for Atlantabased Coca-Cola North America, “If you want to be known as one of the retailers who embraces innovation, you’ve got to go all the way and let the
consumer know that’s your play with signage and other messaging.”

“It’s all about interrupting that autopilot behavior that consumers have in the store,” Alvarado said.

One challenge for retailers is the latest generation—those 21 to 35—coming of age. These millennials are less trusting of big business, making a warning message about the industry’s oldest artifi cial sweetener resonate all the more.

“They have a very low level of trust for institution,” Modi said. Instead, millennial consumers rely on their friends for recommendations, whether it’s a co-worker they see every day or a distant but respected acquaintance they  communicate with only through Facebook.

“It’s when recommendations start coming in on social media that sales really begin to improve,” Modi said.

To that end, Alvarado encouraged retailers to call out soda makers to turn things around. “Challenge us,” he said. “Every time we walk in your stores, ask us: What are you doing to sell more in my store?”

Energy’s Boost
One of the most active beverage categories on social media is energy drinks. With sponsorships of extreme-sport athletes and unique events, such as Red Bull’s Flugtag competition and Monster’s sponsorship of skating, surfi ng and snow events, the suppliers are keeping their brands in front of their key demographics’ eyes.

“Think about all the things that Red Bull does that make someone think, ‘Oh, I’ve got to post that [on Facebook],’ ” Modi said.

Still, energy-drink sales trends are slowing. The young category overall is growing by about 5% today, compared to the double-digit (up to 20%) growth of past years. The category is maturing, and consumers have taken notice of the headlines surrounding energy drinks and the pending lawsuits that claim the drinks are dangerous. Still, Modi doesn’t think that has had much of an effect on sales.

Energy-drink sales grew 8.6% in c-stores for the 52-week period ending Aug. 10, 2013, according to Nielsen data presented by James Ford, head of category and shopper insights for Red Bull North America, Santa Monica, Calif.

“The convenience channel is driving energy-drink growth,” he said. “And energy drinks will continue to be the biggest growth contributor to the beverage category through 2017 and beyond.”

C-store retailers attending the Cold Vault Summit generally agreed that energy drinks are still a bright spot in the cooler, bringing a high-margin ring to the checkout as the major energydrink makers—Monster, Rockstar and Red Bull—maintain a busy newproduct introduction pace to keep the category fresh.

The Wonders of Water
Bottled water is also gaining space in the cold vault as the subcategory continues its march toward becoming the No. 1 beverage in the United States.

The growth comes as usage occasions expand and variety increases, said Chelsea Allen, senior manager, category and shopper solutions, for Nestle Waters North America, Stamford, Conn.

“Bottled water outsells sodas in 13 U.S. markets today,” she said. “It will be the No. 1 beverage in the country in 2016.”

The opportunity for retailers is to grab as much share as possible of the category while it’s still growing.

“Smartwater is the fastest-growing brand, and private-label [water] is growing on distribution gains,” Allen said. “But … we know that brands bring people into your stores. In fact, 44% of all bottled-water households will only buy branded bottled water.”

To improve water sales, Allen encouraged retailers to offer single-serve packaging for the three main water segments: premium, popular and value waters. She also urged retailers to stock 12- and 24-packs of water. “Nearly 6 million shoppers shop in convenience stores and buy case pack water,” she said. “But only 1% of households buy case water in c-stores. It’s a real opportunity.”

Favoring Flavor
Millennials are helping change another aspect of the beverage landscape: They’re more willing to experiment with new flavors. They join the growing Hispanic demographic in a desire to sample bolder flavors. When you add millennials’ $1.7 trillion in spending power to Hispanics’ $1.2 trillion, the result is a “structural change” to the country’s palate.

“It’s the blending of America,” Modi said. “The white consumer is taking culinary cues from Hispanic, Asian and African-American consumers.”

This led Modi to suggest beverage manufacturers should focus less on low-calorie products and more on new flavors that appeal to this new desire for stronger flavors.

“We’re at a point in the United States where companies are taking ingredients out of their products” to make them seem more natural, Modi said. “Instead, there’s not enough flavor.”

The most obvious and successful evidence of this trend is in the beer and wine categories. One reason: By 2018, 80 million millennials will be of legal drinking age, and 20% of millennials are also Hispanic, according to Darren Tristano, executive vice president of Chicago-based Technomic Inc.

For wine, the move has been toward mixing varietals to create new flavors and indulging the millennial consumers’ sweet tooth.

“The millennial doesn’t want to drink what their parents drink,” said George Ubing, national director of the convenience channel for E. & J. Gallo Winery, Modesto, Calif. For Gallo, the goal of turning wine into a more refreshing beverage has prompted innovation. Leading the way are Barefoot’s lighter, more thirst-quenching line extensions Refresh, Moscato and Bubbly; and a Liberty Creek wine packaged in a Tetra Pak to target on-the-go lifestyles.

Beer’s story has been told many times: The growth is in “better beers”—imports, crafts, higher-end brews from major brewers—as consumers seek more flavor and diversity, even at greater expense.

“There’s a definite shift away from domestic beers,” said Tristano. “Today, it’s craft beers, cider and imports that are growing. When they become too popular, that’s when millennials say, ‘Wait a minute. I want to try something different.’ ”

That, to Modi, is an opportunity. Their willingness to experiment and try new flavors gives retailers permission to “reduce the SKU capacity, but supply newness,” he said. That is, don’t feel the need to stock every variation on a subcategory; instead, stock the most popular and the newest to maintain the fastest-selling brands while providing customers the ability to experiment.

This theory is backed by research that shows a balanced beer portfolio is the most successful way to grow overall beer sales, as outlined by Dean Zurliene, St. Louis-based Anheuser-Busch’s senior director of category management.

“There’s a lot of shifting in the beer mix today,” Zurliene said. “When retailers manage it from a balanced approach—emphasizing both premium beers and crafts—they win 93% of the time.” One reason is the beer buyer’s likelihood to buy both craft and premium beers or spend money on both segments.

“More often than not, someone who drinks craft beer also drinks premium beer, also drinks value beer, and also drinks import beer,” he said. “The craftbeer shopper only spends 32% of their beer money on craft beer.”

This data falls in line with research on the millennial consumer, too. “Millennials are not the most brand-loyal consumers,” said Adrienne Nadeau, senior researcher for Technomic. “They crave variety.”

And providing that variety can be a long-term win for retailers, Tristano agreed. “It’s not loyalty to millennials; it’s frequency,” he said. “If you build the frequency, the habit with this generation, you can grow with them.”


Ciro’s Chris Dorman: A Story Behind Every Cocktail

October 15, 2013

rpdormancirosimg4938 304Tasty food is always a draw, but some of today’s restaurant-goers are looking for a taste of eras gone by.

Storytelling is increasingly important to the restaurant experience, said Darren Tristano, a restaurant analyst with Technomic Inc.

Chris Dorman, beverage director for SoHo Hospitality Management, described how history influences cocktails at Ciro’s Speakeasy and Supper Club, the Prohibition-themed lounge in South Tampa.

Dorman joined SoHo about two months ago after relocating from New York City, where he was involved in several restaurant and nightlife concepts with historic themes.

Tampa Bay Business Journal: What attracted you to Tampa Bay?

Dorman: Tampa had an interesting cocktail culture that was growing already. Tampa is one of those places where they’re into the culture. People understand what they’re doing and are trying to push it forward. Down here, a few [places] I see doing that consistently are Sidebern’s, Fly Bar & Restaurant and Anise Global Gastrobar.

TBBJ: What are some of the new ideas you’re rolling out?

Dorman: We’re going to get more seasonal than we’ve been in the past, where every six or seven months you’ll find new cocktails on the menu based on what’s in season. One new cocktail is called the “Flapper’s Delight.” It’s a gin-based cocktail [that] comes in a classic cocktail champagne flute … We have another cocktail called the “Special Delivery.” During the Prohibition, people’s liquor bottles were painted white to look like milk. At 9 a.m., you were having milk delivered. It goes back to having a story behind the cocktail.


Chipotle takes on craft beer with addition of 5 Rabbit

January 14, 2013

CT  biz-5-rabbits-cover 1030 kmFor years, Chicago’s Chipotle restaurants have offered the beers you might expect at a Mexican fast-food place, including Corona, Pacifico and, to satisfy the most American of palates, Miller Lite.

However, in an experiment that could reveal just how far craft beer has moved into the mainstream, a small Chicago craft brewery with a Latin theme is being added to the roster.

Fifteen Chicago Chipotles will carry two beers from 5 Rabbit brewery in the coming week: a simple golden ale called 5 Rabbit that is reminiscent of Corona, and 5 Vulture, a dark ale brewed with chiles and spices that is akin to Negra Modelo.

If sales are brisk, Chipotle said, it could expand 5 Rabbit to its approximately 75 Chicagoland stores, as well as add other craft brands. Chipotle’s foray into craft beer underscores a growing mainstream interest in the craft industry that was perhaps best highlighted by Anheuser-Busch’s 2010 acquisition of Goose Island.

That sale came more than 20 years after Goose Island started as a small brew pub on Clybourn Avenue and spent years building its name and reputation. With interest and sales in craft beer booming, small breweries needn’t wait so long to jump into the mainstream anymore.

 Darren Tristano, executive vice president with Chicago-based research firm Technomic, Inc., said that’s because matchups such as 5 Rabbit and Chipotle have become easy wins for both parties. For 5 Rabbit, the deal means an expanded audience, while Chipotle solidifies its position as an upscale casual restaurant with an edgy product, Tristano said.

 “Craft beer has become a pretty big driver, and especially for a more affluent crowd,” he said. “It’s very well in their customer base to add these beverages.”

Chipotle and 5 Rabbit are a natural fit in several ways: Founded by a Mexican and Costa Rican who moved to Chicago, 5 Rabbit has positioned itself as the nation’s first Latin-themed craft brewery. For the last 18 months, its beer has been made under contract at six breweries in Illinois, Wisconsin and Michigan. But sales were so brisk that 5 Rabbit sped up construction of its brewery in Bedford Park, which should be in production by year’s end. It produced about 2,000 barrels in its first year and aims to make about 6,000 in 2013.

Chipotle will present the small brewery with its largest and most mainstream audience yet. With the added production from the new facility, brewery co-founder Isaac Showaki said they will have no problem keeping up with demand.

Showaki said he spent eight months trying to get the deal done, highlighted by a meeting in mid-July with a company executive at a downtown Chipotle for which Showaki arrived with bottles of 5 Rabbit to pair with the food. He said he was confident going into the meeting — “They spend all this money on liquor licenses, but the stuff on the shelves is boring. Why not bring in more exciting stuff?” — but also amazed to get the attention of a large chain.

“At a place like McDonald’s, it would be almost impossible,” Showaki said. “The first people they would talk to is Anheuser-Busch and Miller.”

That said, Showaki said, “They want to see results. It’s a go, but it’s a trial period.”

Scott Robinson, a Chipotle marketing strategist for national events, said Chipotle restaurants have carried regional craft beer, but that 5 Rabbit will be the first in Chicago.

“I was impressed with their non-traditional approach of taking these Mexican-style beers and adding a whole lot of personality to them,” Robinson said. “We think the downtown Chicago folks will recognize the beers, and that it will bring some excitement.”

Julia Herz, of the Colorado-based Brewers Association, noted that “in the recent past most craft brewers have not had the interest of the chains.”

“It’s a wonderful sign of the times that businesses update their models to include local brands beyond the mass produced,” she said by email.

Showaki said he has no concerns about being perceived as a “sellout” for taking his beer mainstream.

“To go mainstream is nothing negative,” he said. “We embrace it. The more people that enjoy your product, the better for everyone.”

Laura Blasingame, owner of The Map Room who was an early champion of 5 Rabbit, agreed.

“It says a lot when a big firm like Chipotle knows well enough to serve a good beer with its supposedly good food,” she said. “I think it says they’re waking up and the American palate is changing.”

Blasingame said she has no concerns about pouring the same product available at a fast-food Mexican restaurant. In fact, she said, a keg of 5 Rabbit beer sits in The Map Room cooler, waiting to be tapped.