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Adding Wine to Casual Dining not a Piece of Cake

Posted: Monday, 03 October 2011 15:46

Adding Wine to Casual Dining not a Piece of Cake

Oct 03 : Barista, Pizza Hut, Nirula’s and Creme Brew L’Otel Le Café, the few coffee chains and casual dining places in India that have recently introduced wine and beer in their Menu with varying degrees of lukewarm response, can take solace from the fact that similar chains in the USA that initiated these concepts to increase profits have also not yet come to terms with the problems and are struggling to keep the idea afloat before rolling out in a bigger way.

Stores specializing in fast and inexpensive meals during the day, including Starbucks, Sonic and the New York chain Guy & Gallard, have been experimenting with adding wine and beer to their menu.  Burger King starting selling beer at its more upscale Whopper Bars in the US last year. Prêt a Manger, the British sandwich retail chain maker, is considering adding wine in its new Paris stores.

Alcohol is one of the highest-margin items on a menu as selling beer and wine can lead to increased revenue. “Alcoholic beverages are highly, highly profitable,” said Bonnie Riggs, a restaurant industry analyst at the market research firm the NPD Group, according to a report in NYTimes.

But some of the chains say that so far, the menu changes have been a lot of trouble with little reward. Logistics involved with selling alcohol can be daunting and expensive. The problems include obtaining licenses, training a staff that has high turnover, slowing down service when IDs have to be checked, and finding a dedicated area for alcohol service- all of them too familiar to entrepreneurs in India.

According to one consultant, fast-food restaurants aren’t set up to be bars. Based upon the amount of sales that most restaurants would generate from wine and beer, it’s just not feasible for most restaurants to do it. With so many employees under the legal drinking age of 21 (twenty-one), fast-food restaurants have a particularly hard time when it comes to alcohol service.

Starbucks which in all likelihood motivated Barista to start serving wine and beer at two of its Delhi stores (in at least one of them the idea is comatose), is testing wine and beer sales in five stores in the Northwest. Three-quarters of its store traffic in the United States reportedly occurs before 2 p.m. every day, so the wine and beer is meant to attract the customers in the evening. Feedback has been positive so far but it has not announced plans to expand the activity beyond these stores.

Burger King started serving alcohol in 2009 by opening Whopper Bars as a more upscale complement to its fast-food locations. Although it has ten Whopper Bars worldwide, it serves beer at only six of them, in part because of licensing issues. Last summer, for instance, it opened a New York location near Times Square and announced that it would start serving beer within weeks, but the store has still not received approval for a liquor license and has given up on plans to serve beer for the time being, according to a spokeswoman.

Prêt a Manger sells alcohol in some of its airport locations- like Coffee Café Day at Mumbai Airport and is considering selling wine in its new Paris stores. But, the CEO of the company admits it is not expected to become an important part of the business.

Oklahoma City based drive-in chain Sonic, added wine and beer to the menu at a new location in Florida in July. The addition was based on the menus of the nearby restaurants, and  meant to bring in customers at night. “When you stand on our patio and look around, you will see almost every concept that is around us has some type of patio feature, and they serve beer and wine, said the Vice President, Mr. Ritger, adding that it gave them an opportunity to really drive the evening traffic.

There are additional costs to serve wine or beer. Besides normal hurdles like obtaining a license to sell beer and wine and training employees, the restaurant has to hire security guards to keep away underage drinkers. Some admit that the returns are not commensurate with returns. Therefore Sonic is considering offering wine and beer at an upcoming beach location in Fort Lauderdale but not at all restaurants nationwide.

If one is irritated by the seemingly unwarranted objections raised by the anti-alcohol groups in India (even Australia has been in the news for similar reasons lately), it may be at least re-assuring  to know that similar problems occur  when adding anything alcohol-related to a menu in the US too. For instance Burger King tested a nonalcoholic breakfast mimosa made of orange juice and Sprite in some cities last year. But watchdog groups protested, claiming that even a virgin mimosa was inappropriate at a family restaurant.  The mimosa is no longer being served at any restaurants now.

It would be a few years before the report card shows the results of these efforts in the US or in India but persistence and will to make it succeed will might just be the decisive factor.

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