Tag Archives: down economy

The Current Economy’s Effects on Alcohol Trends

Cocktails; mage from MorgueFileThe world today is on a new alcohol horizon or at least a more innovative and uniquely individual one.  What’s spurred this?  From more minimal splurging to pop culture inspired throwback cocktails many of the current alcohol trends are rooted in the down economy.

In the past few years, alcohol sales have been less than stellar overall.  However, some categories were down more than others.  More expensive choices such as wine (down 10.8 percent in 2009) and spirits with higher price points (down 5.1 percent by volume in 2009) have fallen by the way side as more economical choices have gained ground, according to an article by Martinne Geller.  While some restaurant goers are still passing up the alcohol option, it is now a bit more inexpensive to enjoy a libation with options such as wine-by-the glass.

However, many people are simply forgoing the experience of eating outside the home all together and simply grabbing a 6-pack to enjoy with a nice meal at home.  According to worldclassbeverages.com, “2009 saw an increase of 7.2% in the sales of craft beer while the overall beer industry struggled with a 2.2% decline.”   This demand for specially crafted brew has also led to a massive amount of operating breweries.  In 2009, there were 1,595 breweries operating in the U.S. which is the highest total since before Prohibition, according to Brewer’s Associaiton.   The BA also approved a new definition of what craft beer itself really means this year, allowing for craft to stand for any independent brewery that produces up to 6 million barrels of traditional beer (up from a previous 2 million).   For brewery workers, this all leads to the hope of more jobs and eventually a better economy.  For consumers, craft beer simply stands for a higher quality with more attention to detail.  Even though a shopper may pay a bit more for a craft brew than a domestic, since they aren’t splurging on items like take-out or restaurants, they feel that they can spend just a bit more and enjoy a higher quality beverage.

This stay-at-home drinking trend has also led to a push that would allow alcohol sales to boost the economy in another way.  Several states have pushed for a repeal of the, sometimes centuries old, blue laws.  Blue laws were originally put into places to provide Christians with an alcohol-free (and in some places real-estate and car sale-free) day of Sabbath, according the SUNY Potsdam Alcohol Problems and Solutions site.  Many nowadays think these laws are not only out-dated, but could be preventing a great deal of tax dollars from being raised due to an entire day void of sales.  In an article on ABCnews.com, Lisa Hawkins of the Distilled Spirits Council of the United States said, “Blue laws … simply don’t make sense in today’s economy. They inconvenience consumers and deprive states of much-needed tax revenue.”   According to the Distilled Spirits Council of the United States, 36 states now permit the sale of distilled liquor on Sunday, 14 of which have joined the list since 2002.  Now with a downturn economy and an upswing in take-home alcohol purchases, many states and communities are pushing for these laws to be gone and to allow Sundays and local (and imported) liquor to help boost the economy.

Like money, fame has always played a hand in trends as well and the new wave of alcohol trends is no exception.  With characters on popular shows (mostly of the cable variety) swilling drinks left and right, it’s not hard to believe that pop culture could have an influence of the adult beverage industry.  However, unlike the influence of shows like Sex and the City that brought in high-priced fruity drinks, this new cocktail movement is a little bit masculine and a lot more of a throwback.  Recently, the tides have turned towards the more traditional drinks served straight or pre-prohibition style.  Thanks to shows like AMC’s Mad Men and HBO’s Boardwalk Empire, bars are now catering more to the harder stuff than in the recent past.

So why is the modern, i-Pod listenening, 3-D watching, technology driven crowd looking back to drinks inspired by the 60’s and even the 20’s?  It could be due to the idea that during a downturn economy people look to more prosperous times with feelings of nostalgia.   Possibly best summed up in an article on consumer trends on euromonitor.com, “..in a world where everything is possible, where anything can happen, people are looking for certainties.”  People today are more interested in exploring drinks that were great in the past, and perhaps improving on them, than creating some new, crazy cocktail.  If ordering a simply Scotch was good enough back in the 60’s, why shouldn’t it be good enough now?

There may also be a trend towards the more straightforward ways of the past.  “I expect mid-century brands and cocktails to continue the climb back to the mainstream as American culture begins to reacquaint itself with authenticity,” said Dean Phillips of Phillips Distilling Company in an article on trends on Signature9.com.   For many it’s not even simply the alcohol involved in these wistful drinks.   As stated in an article in the Pittsburgh Post-Gazette on the Pre-Prohibition drink scene, “The fruit juices are fresh-squeezed, not pre-bottled. The bitters are home-mixed, not store-bought.  And the cocktails themselves take five to 10 minutes to prepare…”  Because so many people are going out so much less frequently, it’s drinks like these, prepared with care and the best of the best ingredients, that will get them to splurge a bit and easy their mind a little when they are spending about 19 cents more per cocktail (according to the NRN).

Eventually, the economy will swing back up and new drinks will come along. But for now, the economy has inspired drink trends that will lift your mood and hopefully save your pocket book.

Marketing in a down economy

Here’s a bit of research I’ve been doing on marketing during tough economic times.

1. Trim the fat

Instead of focusing on how bad things are, try to identify opportunities unique to periods of economic recession. Let’s face it– we rarely make changes when things are going well. According to an article from Experience Thread, “during good times, fundamental problems are frequently ignored, like outdated products, services and technologies.”

It’s only when we are forced to scrutinize every expenditure that some of these redundancies and wasteful practices come to light. Look at where your money is being spent. What about your energy usage?

2. Emphasizing value and networking

The majority of articles I’ve come across focus on ways to cut spending without sacrificing quality; in other words, saving money in ways your customers won’t notice!

Don’t discount! Chain Leader firmly states.

Offering discounts boosts guest counts but also pressures margins and weakens image, the article said. Instead, sell gift card at 3rd party retailers. Host tastings or other special events that will offer customers more opportunities to come visit your establishment.

3. The Club Culture

According to Chain Leader, the loyalty program, or club, is a new trend restaurants are embracing. An email or loyalty program makes it easier to build a network with existing customers and gives them one more reason to come to you.

An article from DM News described efforts by Ted’s Montana Grill to use e-mail and social media to increase brand engagement and customer loyalty.

Their Thanksgiving e-mail invites people to sign up for a Facebook page where they can take surveys about how they like the restaurant. The Facebook page has different content than the e-mail and also encourages people to sign up to receive the e-mails. Both ends work to acquire and retain customers.

It’s a great way to talk to current customers and keep them involved with the restaurant and it’s a good targeted approach to reach guests and to build your list.

Ted’s also sends triggered e-mails for birthdays and anniversaries, as well as monthly newsletters about new menu items, gift cards, new retail items, promotions and events at their 57 restaurants across 19 states.

4. Revamp the menu

According to Nation’s Restaurant News, restaurants introduced a record number of new menu items during October, 2008.

According to a Technomic report, chain restaurants introduced a record-high number of limited-time offers and other menu additions this October as sluggish traffic prompted them to try new customer lures.

Other examples include marketing specialty, limited-time and holiday items for added variety.

5. Know thy customer

Last, and maybe most importantly, restaurateurs must know their customers.

MSNBC offered several tips for conducting customer surveys in order to understand your customers’ interest, goals, priorities and desires, and thus, create “laser-focused marketing that speaks directly to them and solves their specific problems.”