Raising the bar on drink promotions: industry specialists explore new methods of marketing profitable beverage programs with special offers and expanded menu options

Nation's Restaurant News, July 23, 2007

CHICAGO -- Although beverage sales make up a large chunk of the profit in many foodservice operations, just a small fraction of resources are focused on drink promotions. Recently, a group of drink experts discussed ways to better market their beverage items to keep incremental income from dripping away.

Among the questions explored by the group gathered for a roundtable discussion at The Drake Hotel here were how operators could make their beverages more appealing to customers; how they could encourage consumption of beverage alcohol when appropriate and premium alcohol-free beverages at other times; and how tap-water drinkers could be convinced to try something else. The roundtable was sponsored by The Coca-Cola Company, Monin Gourmet Flavorings and Pernod Ricard USA. It was moderated by Nation's Restaurant News.

Participating in the discussion were Mike Ginley, president of Next Level Company, which conducted a survey for Nation's Restaurant News about beverage consumption in casual-dining restaurants; Ed Gleich, senior vice president of concept development for the Arby's Franchise Association; Jeff Grindrod, beverage specialist for Pernod Ricard USA; Tim Johnson, vice president of purchasing and beverage for Champps Entertainment Inc.; Ame Kuyper, director of beverage for BJ's Restaurants Inc.; George Miliotes, director of beverage and hospitality for Seasons 52; Bill Mitchell, senior director for national program development of Sodexho Corporate Services; Terisa Monroe, Coca-Cola Foodservice's director of customer marketing for the central region; Michelle Pae, Olive Garden's director of beverage strategy; Joe Smith, senior vice president for sales of Monin Gourmet Flavorings; and Philip Smith, director of new products and service for Bruegger's Enterprises.

When it comes to alcohol sales, simple fixes can make a big difference, said Kuyper, who saw an increase in sales of wine and spirits at 60-unit BJ's after the Huntington Beach, Calif.-based casual-dining chain, which focuses on its house-made beer, listed wine and spirits on the food menu, rather than segregating it to a separate beverage menu.

"We've definitely seen an increase in wine and spirits out of it," she said of the menu change.

Johnson admitted that Littleton, Colo.-based Champps had done the reverse about 18 months earlier.

"We went and produced a separate menu, and the big mistake was taking the six core beverage alcohol drinks off of the main menu and putting them into the specialty drink menu, and taking the wine list off of the main menu and having it be separate," he said, resulting in a decrease in wine and spirits sales. The 63-unit casualdining chain is now in the process of going back to the older format, he added.

Joe Smith from Monin advocated table tents, pointing out that Orlando, Fla.-based Olive Garden, which is owned by Darden Restaurants and a Monin client, uses the tents to promote sangria.

"We can track the sales, obviously, and we see a significant increase when that table tent is actually on the table," he said.

Pae, who is responsible for beverage alcohol sales at the 603-unit Olive Garden casual-dining chain, said the table tents are used to show pictures of beer and cocktails paired with appetizers. All food has suggested wine pairings, she said, but the menu never has suggested pairings with nonalcoholic drinks. She added that they were considering using different table tents at lunch that would show pictures of alcohol-free drinks with specific dishes.

Monroe, from Coca-Cola, suggested dovetailing promotions of alcoholic and nonalcoholic beverages.

"So if [you're promoting] a pomegranate martini or something like that, then you also have a nonalcoholic version of it that can be featured at the lunch daypart, or in the evening if the person is not going to have an alcoholic beverage," she said.

She said that would make it easier for servers to remember the promotions. Pae said 35 percent of Olive Garden's guests would never order an alcoholic beverage, "but I also want to be able to have those people have as great an experience as people who are drinking the pomegranate margarita."

Mitchell, from Gaithersburg, Md.-based onsite feeder Sodexho, said a promotion that combined Coca-Cola and Monin products worked well because it gave customers out-of-the-ordinary options.

The promotion, implemented last winter, was called "Daily Departures, Escape to the Exotics."

"It really created a nice change of pace and was a really good sales generator," he said.

In the summer, they add a little fruit puree to their lemonade.

"We can sell that for about twice of what we can for the base lemonade, and they fly out the door in the summertime," Mitchell said.

"That's what Red Robin does," said Monroe of Coca-Cola, noting that the casual burger chain's lemonade with strawberry puree sells for $4.

Kuyper of BJ's said that finding points of differentiation from competitors was important. BJ's does that not only with its beers, she said, but also with its wines, of which they sell 19 types by the glass instead of the more typical seven or eight varieties made available in many casual-dining restaurants.