It’s time for challenger brand restaurants to raise a glass

October 15, 2014 | blog | By Mike Sullivan

When it comes to competition in the restaurant world, it doesn’t matter whether you’re casual dining, fast casual, or QSR. The battle royale for customers is brutal and getting tougher all the time.

What draws you to your favorite restaurants? Is it the one or two signature menu items you just can’t get anywhere else? Is it the service or the environment? Maybe it’s the robust marketing and promotional activity that grabs your attention. Whatever the force is that draws you to your favorite dining spot, you know what it’s probably not? Alcohol.

As fast casual continues its rise and casual dining looks for ways to compete, surprisingly, beer and wine just don’t seem to be a big part of the mix. There are any number of reasons that could explain why: People don’t drink as much anymore; nobody drinks at lunch; it’s too hard to protect inventory; and, if you’re a QSR, most of your staff isn’t old enough to serve it. All valid reasons. But all, seemingly, a bit short-sighted.

Fast casual is exploding because American consumers are looking for higher-quality food and fascinating new flavor combinations. Call it the Food Network effect. Call it simply having more choices. But we’re all on the hunt for better, tastier, more interesting dining experiences. Alcohol (in particular, beer and wine) opens up a whole new variable that makes those experiences more customizable and more enjoyable. And yet, very few chains have made alcohol sales a priority.

The Restaurant Experience: What Customers Are Looking For

One trend that seems ripe for opportunity is the recent growth of craft beers and ciders. According to Technomic’s 2014 On-Premise Craft Beer and Cider Report, 55 percent of all craft beer and cider purchased in the US is being consumed in bars and restaurants. Across the country, many smaller restaurants are having great success pairing craft beers with certain dishes, or featuring wine from local vineyards and creating promotional periods around those pairings. The big chains just don’t seem interested. And if you’re an underdog, that’s very, very good news for you.

As a challenger brand restaurant, what would it look like for you to lean into beer and wine? As you ponder that, consider the three states of challenger branding:

1)   State of Market – Very few, if any, big restaurant brands have integrated alcohol into their sales culture in any significant way (and no, TGI Friday’s Jack Daniels Grill doesn’t count.) Whether with craft beer, local wines, or just smart marketing and suggestive selling on-premise, there is a huge opportunity for a brand back in the pack to step up and get the party started.

2)   State of Mind – Challengers are all about open-minded thinking and looking for the yes when everyone else says no. There are dozens of valid reasons why people aren’t drinking alcohol in restaurants. Cost? (When iced tea is $2.50, $3 isn’t a lot for a cold bottle of Bud Light). Healthier eating? (A glass of Cabernet is a lot better for your heart than fried cheese, and it’s probably cheaper.) The key here is making up your mind to find a solution where there doesn’t appear to be one. Alcohol offers solid margins, an enhanced dining experience, and if done well, potentially a point of differentiation for your brand. Think you can, and you will.

3)   State of Readiness – The market is primed. You’ve made up your mind. The big question—Are you ready? The answer this second is probably no, but don’t let that discourage you. Put a plan together and make it happen. What does that look like? Maybe it’s a seasonal menu featuring special pairings of food and beverage. Maybe it’s partnering with regional brewers and vintners in a promotion that’s mutually beneficial. Whatever you do, just don’t forget to train your staff so they know the products and know how to sell them. Get them ready, and go!

Your customers want a memorable dining experience they can’t easily get anywhere else. Before you spend months and thousands of dollars researching what the next Sriracha, pretzel bread, or pumpkin trend will be, sit down, crack open a cold one and relax for a second. The solution to driving traffic and sales might be sitting there right in front of you.

Michael Tuggle is Chief Imagination Officer at The Loomis Agency, the country’s leading challenger brand advertising agency

Mike Sullivan

President at LOOMIS, the country’s leading challenger brand advertising agency


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