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The Billion-Dollar Revenue Opportunity for Beverage Programs in the Casual Dining Channel Revealed by CGA'S New Data

Posted on May 01, 2021
CGA PRESS RELEASE

APR 29, 2021- This week, CGA have announced the launch of their Operator division which brings a host of unique beverage insights to America’s bar and restaurants chains. The very latest sales data and consumer insights have today revealed how casual dining chains have a huge untapped beverage opportunity as the On Premise channel re-emerges from severe restrictions over the last 12 months.

30% of Recent Casual Dining Visitors think there is an Opportunity to Improve the Quality of the Beverage Offer

CGA’s latest large scale consumer study of On Premise users (OPUS) has found that approximately 30% of customers who frequent the top chains don’t agree that the range of drink brands is of ‘good quality’.

Set against a backdrop of a rapidly returning customer base as COVID-19 restrictions are lifting, evidence suggests that many of the most visited casual dining chains could improve their guest experience, and sales performance by reassessing their beverage offerings. 

The Potential Size of the Prize

“With almost 40 million alcoholic drinks sold weekly in America’s casual dining chains, small $ gains per beverage order can very quickly add up to some serious revenue gains. Which is not to be sniffed at considering the beverage program is one of the most profitable aspects of any restaurant’s operation”, said Alexandra Martin, Operator & Analytics Director for North America.  

The research indicates that there is a clear, consumer-driven, opportunity to re-assess and to further optimize the drinks range on offer for many casual dining operators. So, what could a better designed and delivered beverage program mean for the channel? 

“Let us assume that operators were able to better meet the needs of those 30% of guests who are under-whelmed by the beverage program.  Assuming only a $1 increase, for just a single drink per week, then the casual dining channel would generate an additional $16.3 million of sales per week…or $845 million per year.  Again, this pessimistic projection is only accounting for a small uplift for the 30% of unsatisfied guests and assumes no additional uplifts from other guests”, Martin continues. 

Demand is Growing and Casual Dining Chains are Poised to lead On-premise Recovery

In CGA’s latest COVID-19 Impact study, it was found that 62% of American consumers had been out to Bars/Restaurants since their local market re-opened.  With 59% of consumers also saying that they were planning to visit the trade in the next two weeks, demand is certainly coming back strongly.

Casual dining chains are among the most visited of all On Premise venues and CGA’s recent Channel Strategy study revealed that 66% of all On Premise consumers visit casual dining chains, with 40% of those visiting the channel weekly. This makes the casual dining channel indispensable to a healthy On Premise recovery, both financially and in the eyes of consumers. 

This consumer demand is unlikely to wane in the foreseeable future as 80% of consumers say they plan to revisit the casual dining channel with the same or increased frequency compared to pre-COVID-19. Last week’s analysis of sales data from many thousands of casual dining outlets throughout America also shows the most rapid rebound of any channel – with the average casual dining chain posting total $ sales numbers which were within 5% of the equivalent week in 2019.

Improving the Guest Experience Through the Beverage Program

As any casual dining operator will confirm, beverage alcohol is extremely important to maximising visit spend. CGA’s latest transaction-level data for example shows that the average check which includes an alcoholic beverage is 60% to 180% higher than one without.

So, what do casual dining visitors want from their post-COVID-19 visits? 

55% of those surveyed say that they plan to buy premium drinks/brands in their next visit to the trade. 40% of casual dining customers also say that they desire an extensive range of beverage brands to be available, with multiple offerings in the premium and craft/artisan categories. A further 20% say that this availability of choice and quality is ‘essential’ to their satisfaction with the concept’s beverage program.

CGA’s Alexandra Martin, Operator & Analytics Director for North America, said: “This latest batch of research highlights that the On Premise is back and consumers are really excited about returning to their favorite bar and restaurants again! While goodwill, interest and excitement is high, the challenge for operators is to deliver a phenomenal experience in an operating environment which is still very difficult.”

“The evidence is overwhelming for the positive guest impact that the right beverage program can deliver and now is the time for the much-loved casual dining brands to look at what their guests really want in their glass after a year of trail and experimentation at home. CGA’s new consumer and analytics solutions can support operators to unlock this potential to ensure a robust product rationalization and overall optimization of the beverage offering.”

Commenting on CGA’s global expansion, Scott Elliott, CGA’s Managing Director, Americas said: “We are delighted to finally bring our suite of tried and tested operator insights to the American market. CGA’s ultimate goal is the same for operators as it is for our many beverage customers around the world; to provide the most robust data, insight and industry expertise to enable better decisions, less risk and easier growth. With similar services now available in Canada and Mexico (with other LATAM markets coming on stream before the end of 2021) we are truly building an unparalleled view of what the Americas On Premise visitor wants and needs from this experience-led channel.”

About CGA

CGA is the definitive On Premise measurement, insight and research consultancy that empowers the growth of the world’s most successful food and drink brands. With more than 30 years’ experience and best-in-class research, data and analytics, CGA is uniquely positioned to help On Premise businesses develop winning strategies for growth. 
 
CGA works with food and beverage suppliers, brand owners, distributors, government bodies and bar and restaurant operators to protect and shape the future of the On Premise experience. 

CGA’s mission is to use phenomenal data and expert insights to give its customers a competitive edge and to ensure the market we love is as vibrant and healthy as is possible. 

Website: www.cgastrategy.com

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