Do premium cocktails face an uphill battle as inflation puts a squeeze on consumer spending? A group of beverage experts tackled that question and more at FSR’s second NextGen Restaurant Summit earlier this month in Atlanta. They weighed in on how to make cocktails worth the price—either by enhancing their appeal to justify the cost or by finding ways to make them more affordable.
“We are in the experience business, so I’m a big fan of showmanship—the delivery and presentation and really bringing that wow factor,” said Tony Pereyra, owner of The Spirits in Motion, a bar and beverage consultancy. He highlighted trend-forward techniques like fat washing, foams, and layered drinks as ways to elevate a beverage menu. He also pointed to tableside presentations as an effective method for leveling up the guest experience.
“I think that’s huge, and it’s really on a swing back,” Pereyra said. “Being part of the experience business, you should constantly be looking for ways to bring that ‘aha moment’ to the beverage.”
Ian Welby, vice president of beverage and execution at 65-unit neighborhood gastrobar chain Bar Louie, said he’s been leaning deeper into premium spirits. “I think the perceived value is in the product you’re presenting and the experience you’re providing, versus the dollar amount, or the discount, or whatever promotion you’re running,” he said. “Can your margin be larger if you aren’t using a premium tequila? Sure, but the guest also recognizes that.”
When Bar Louie swapped out the vodka in its dirty martini for a higher-quality option last year, it brought about a nearly 30 percent increase in sales, with no change to the price, he added.
“If you’re going to come in and pay $13, $14, or $15 for a cocktail, I want to make sure it’s worth it for you,” Welby said. “We want to make sure that the guest knows what they’re getting and that we’re also getting credit for the effort that we’re putting in.”
Being thoughtful about the brands you work with can also add value, according to Jackson Cannon, beverage director at Eastern Standard Hospitality in Boston. “When I use a name brand that I believe in, I can charge a little bit more, and my percentage might suffer, but my cash in hand goes up,” he said. Leveraging those brands helps tell a story, he continued—a key part of marketing a beverage program across bar interactions, social media, and the menu.
“The bigger brands can be great partners in that endeavor of telling the story, which creates the prestige and allows for that sticker shock to wear off,” Cannon said. “You can still find value in this world where things have skewed up. Sometimes that means going for something more valuable than just trying to strike the lowest price point.”
Philip Bollhoefer, vice president of food and beverage at Parks Hospitality Group, noted that balancing the menu with higher-margin “workhorse” options is key to offsetting the higher input costs of more premium drinks.
“Any kind of house cocktail that’s going to be at the lower end of your price point is going to satisfy that budget-conscious guest, and it’s going to be a workhorse,” he said. “When you’re selling that $17 old fashioned that you’re running 26 percent beverage cost on, your 18 percent workhorse is really helping to supplement that.”
Stay tuned for additional insights from these beverage leaders about upcycling ingredients, empowering staff, and more in FSR’s November “Liquid Intelligence” article.
