Casual Restaurants Not Adequately Leveraging the Strength in Craft Beers


According to GuestMetrics, based on its POS database of more than $8 billion in sales, casual restaurants appear not to be leveraging the strength of craft beers as well as fine dining restaurants and bars.

“On pretty much every dimension, casual restaurants are not doing as effective a job as fine dining restaurants or bars in leveraging the growth in craft beers,” says Bill Pecoriello, CEO of GuestMetrics LLC. “Based on our data, craft beers accounted for 20 percent of beer sales in casual restaurants, versus the 22 percent in bars and 28 percent in fine dining restaurants. Additionally, the average price being charged by casual restaurants for craft beers is only $5.09, compared to $5.53 in bars and $6.16 in fine dining restaurants. This is a function of differences in brand mix, promotional levels and as well as pricing architecture across the sub-channels. While it may not be feasible for casual restaurants to charge the same amount as fine dining, there should be room for closing the price gap relative to what bars are realizing.” 

“In further analyzing the beer category within the different on-premise segments, while craft beers achieved a 7 percent growth in casual restaurants in 2012 relative to the prior year, this lagged behind the 11 percent growth in bars and 13 percent growth in fine dining restaurants,” says Peter Reidhead, VP of Strategy and Insights at GuestMetrics. “While casual restaurants obviously need to have a balanced offering in the beers they carry, we believe there could be a positive halo effect on overall beer sales from dialing up their focus on craft beers.”

“In addition to having a lower share of beer sales and slower growth from craft beers, casual restaurants appear to be leaving additional money on the table by not keeping pace with the price increases in craft beer,” says Brian Barrett, president of GuestMetrics. “While the average price of craft beers in fine dining restaurants and bars increased more than 3 percent in 2012 relative to the prior year, craft beer pricing in casual restaurants only increased 2 percent. Given the tight economics being experienced by casual restaurants right now, optimizing the brand mix, discount levels and pricing architecture within the beer category are key to improving revenue trends.”     

News and information presented in this release has not been corroborated by FSR, Food News Media, or Journalistic, Inc.

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