Fast-Casuals, QSR’s and Adult Beverages, Good Mix?

Fast-Casuals, QSR’s and Adult Beverages, A Good Mix?

Margins on a “food only” menu can be a challenge especially when seasonality, bad weather or other supply chain issues arise to disrupt the regular flow of food service business.  A menu item(s) that may not be subject to such challenges is of course alcoholic beverages for which production and availability is not at the mercy of temporary weather changes and since most alcohol travels well transportation over distances is usually not an issue.  This month we’ll share our thoughts on how to determine if alcoholic beverages are good for the product mix for non-traditional operations.

We’ve been reviewing the dynamics of alcoholic beverages in the fast-casual segment for some time and believe part of the decision is predetermined if your business caters to the crowd seeking smoothies, ice cream or cupcakes – probably not the best fit.  Keeping that in mind we don’t believe any specific cuisine immediately eliminates alcohol options as almost every culture consumes it. Yes there are challenges of pairing specific types of alcohol with some ethnic cuisines (Asian foods appear more “beer” friendly) so some additional research by the operator may be necessary prior to determining the appropriate adult beverage mix to offer their guests.

The key item we believe all operators should consider is profitability beyond what may be realized with only food.  A review of industry practices suggests alcoholic beverages may be marked up from as little as 50% to 300% depending upon the segment so that alone should be a catalyst for the fast-casual operator to at least perform some due diligence regarding how adult beverages may fit their business model.  An initial review of the food menu with an eye toward how guests consume adult beverages with similar foods in other restaurants may serve as a simple evaluation tool.  A key source of information (many operators overlook) is just to quiz your regular guests, we suggest medium to heavy users, to get a grasp on their interest level as some guests may see the addition of alcohol positively for dinner while not so much as compared to the lunch day-part.  

What piqued our decision to share our clients’ experiences was a recent article (QSR Magazine, August 2018) that reviewed the very issue of product mix opportunities for adult beverages in the fast-casual segment.  As accurately stated wine and craft beer consumption are both in growth mode and including them on a fast-casual menu will help build the operators’ bottom line.  We would suggest “when possible” operators examine the potential of both draft beer and draft wine offerings.  Operators familiar with draft beer you understand it offers the quality of being a fresh product as compared to bottled or can product.  Recently canned wines have broken onto the scene and while these are great especially for carry out (with the appropriate license) it’s still not a “fresh” product.  The same challenge exists with wine service systems that expel wine from individual bottles using an inert gas mixture which over time can rob the wine of both its’ bouquet, taste and may require up to two (2) years to realize ROI.  Individual bottles on a “draft” system do not provide the opportunity for operators to “brand” their house pour varietals and use the wines as an additional branding tool.

Draft wine systems do exist that do not allow the wine and propellant gas to mix together therefore maintaining the integrity of the wine.  Another issue is the type of wine keg and its’ ability to preserve the wine as the vintner intended.  We also suggest the operator look into where the wine is being “kegged” at the winery = freshest as compared to a logistics depot where wine is tanker-transported from the winery overland at the expense of the environment and final cost to the guest.  For operators who may be scratching their head at this point “WE” have performed that due diligence and can share our accumulated knowledge of how to capture 100% of your house pour wine profits, see us at www.themenuspring.com and we’ll begin the sharing process!