Declining Consumption a Challenge For Canadian Restaurant Operators
- Overall alcoholic beverage servings declined in 2014
- Alcoholic beverage consumption has declined 1 per cent per year since 2010
- Beer servings are down 6 per cent
- Cocktails and other drink servings are down 10 per cent
- Wine and craft beer servings are up 16 and 7 per cent respectively
Canadian restaurants are working hard to find ways to combat an ongoing decline in alcoholic beverage consumption. According to research by The NPD Group’s CREST® Monitor, alcoholic beverage servings have declined by 1 per cent per year since 2010; a five year trend that has created significant volatility in the foodservice industry.
“The beverage menu is often overlooked by consumers in an effort to minimize their cheque size,” says Robert Carter, Executive Director at The NPD Group. “As a result operators are constantly seeking out innovative strategies to add value to the dining experience and to encourage higher-margin beverage sales.”
Strategies to Increase Consumption
Some of these strategies include offering specials, pairings, and customized recommendations. When The NPD Group asked customers what usually triggers their alcoholic beverage choices, 20 per cent of beer drinkers said “special deals”, which often involves a discounted price. For wine customers, 23 per cent say “pairing with another item” triggered their purchase: adding value by elevating the dining experience. Interestingly, only three out of ten beer customers automatically reach for their favourite brand when raising a pint, leaving 70 per cent to make a choice every time they visit.
Booze by the Numbers
Beer, which is Canada’s most popular alcoholic beverage, has declined by 6 per cent this year while cocktails and other drinks were down by 10 per cent. However, not all categories are feeling the same pinch. Craft beer servings have experienced strong growth of 7 per cent year over year. Furthermore, craft and microbrew beer now account for 17 per cent of all beer at casual dining restaurants.
Consumers are also turning to wine much more often, as servings in this category have grown by 16 per cent year over year.
“These declining consumption levels are certainly a challenge for restaurant operators,” says Carter. “Being aware of consumer trends, and then acting on them can make the difference between turning a profit and having to close your doors”.