Drink Sales Stagnate in Restaurants and Bars
The overall softening in adult beverage is playing out more in restaurants and bars than at retail, according to Technomic's just-released Special Trends in Adult Beverage Report: 2014 State of the Industry.
Adult beverage volume in the on-premise channel, which includes restaurants and bars, contracted 1.3 percent, while retail volume declined 0.7 percent in 2013, according to the report.
"Consumers pulled back on drink occasions at restaurants and bars," David Henkes, Technomic vice president, says. "Wine and spirits were essentially flat on-premise, while beer declined. That said, there were categories and segments that did well on-premise, thanks to creative presentations and programs, and on-trend flavors and formats. Restaurant and bar operators have opportunities to position spirits, wine, and beer offerings as a point of differentiation and grow sales going forward."
The unusually harsh weather conditions during the first two months of this year resulted in overall foodservice sales declining 3-4 percent nationally and 7-8 percent in weather-affected markets such as the Northeast and Mid-Atlantic states, according to Technomic analysis. As a result, projections call for drink sales in restaurants and bars to remain challenged in 2014, although Technomic research director Eric Schmidt sees continued growth in whiskey, craft beer, and domestic table wine.
"These adult beverage categories, driven by unique and often food-friendly flavor profiles, are really relevant to today's consumer," he says. "In the hands of the right bartender and promoted properly, these products can deliver on both experience and value. Although overall adult beverage volume will be challenged this year, we expect dollar growth from the ongoing consumer shift to more expensive categories, such as high-end whiskey and craft beer."
By all accounts, craft beer continues to climb in popularity. The Brewers Association,the trade association representing small and independent American craft brewers, reports craft brewers saw an 18 percent rise in volume in 2013, representing a total of 15.6 million barrels, and a 20 percent increase in retail dollar value. Craft brewers reached 7.8 percent volume of the total U.S. beer market, up from 6.5 percent the previous year.