Liquid Opportunity

Liquid Opportunity

A large and increasingly critical factor in sales growth, not to mention profitability, has been the performance of beverage alcohol. As consumers continue to travel, sales should continue to grow. The mix of drinks consumed has changed as the industry has changed; while beer still represents the largest share of drinks consumed, it represents just over a third of all drinks.

Interestingly, wine is making a strong comeback and represents about 30 percent of all drinks consumed in hotels. Still, beer is the driver for sales and volume for many hotels, and there have been many changes over the past several years. For hotels, there are three big opportunities for beer: looking at the mix of draft to bottle, looking at craft and microbrews, and doing a better job of selling food alongside beer orders.

Bottle Versus Draft: Many segments of the on-premise industry have been trending toward draft beers. It’s also true that the hotel segment has a higher share of occasions from bottled beer (69 percent) than its casual dining counterparts (51 percent). This partially stems from the higher incidence of bottled beer in catered events, but it’s clear hotels have opportunities to do a better job of offering draft beer options to the consumer.

Craft/Microbrews: Hotels do tend to have higher incidence of import beers than casual dining, and consumer usage of craft/microbrews tends to be in close alignment with what their casual dining counterparts show. Craft beers, however, still represent far less than 10 percent of total occasions, and given the strong demand that we’re seeing from consumers for these types of beer, there’s a definite opportunity for hotels to move more in this direction. More and more local and regional craft beers have been appearing in the hotel bar, and it provides travelers an opportunity to sample something local.

Selling More Food with Beer: Our data indicates hotels have a much lower propensity for consumers to consume both food and beer at the same time versus other segments, most notably casual dining. For hotels, food tends to be consumed with a beer order somewhere between two-thirds and three-fourths of the time, while in casual restaurants it tends to be 85 percent of the time or more. Appetizers are the top food consumed with beer, and we don’t see hotels doing a particularly effective job of upselling various types of food with beer or with other types of beverage alcohol.

A greater focus on the beverage alcohol category, and beer specifically, can yield positive results from both a top-line and bottom-line/ profitability perspective.

View the full article on Hotel F&B


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