September 9, 2022 | By Gabriel Fore, Sr. Account Manager, IMI, Certified Sommelier, National Beverage Strategist
Free-Spirited Summer, Feature Series: Part II
Could the Alcohol-Free Category be the Biggest Missed Sales Opportunity in National Accounts?
To find out, avoid the product analysis paralysis and take a strategic menu approach.
NOTE: If you missed my initial blog post on why I have embarked on a Free-Spirited Summer, please read here.
Old Habits Die Hard
Whenever a new beverage category begins to gain traction, there’s often a temptation for us in national accounts to focus intensely on the products within the category.
For suppliers, it can be ensuring they submit these products to RFPs, send samples to their customers, etc. For operators, it can be a thought process like “If we just have one or two of these products for our guests then we’ll check that box.” Or, more commonly, “I’ll wait and see if guests are asking for it before making a decision.”
With the Alcohol-Free category, the response seems to be no different — at least from my research and observations.
Admittedly, I focused mainly on the products at first myself — mostly curious about which came closest to the “real thing”. But as I dug in, it quickly became apparent that before I go deeper down the rabbit hole of products, I needed to understand better what was driving the development and proliferation of these products: the people and the culture.
After all, let’s be honest, if people weren’t interested in limiting their alcohol consumption, none of these products would exist. Take the Nielsen chart to the right, which illustrates how consumer behavior is the main driver of this trend, with alternative beverage products being far less (I’m going to chalk that first bar up to residual COVID-19 behavior, given the timing of the survey.)
Now, before all you suppliers come at me with pitchforks and torches, let me be clear: I think the products in this category are playing a huge part in its growth. They are helping those whose behavior/desires have changed find satisfaction in new ways, and I strongly feel that alcohol-free products are underutilized by most, if not all, national accounts. My point here is not that the products don’t matter, but that the people matter more, specifically their behavior and the culture they’re creating, whether purposeful or not. Perhaps differently than almost every other beverage category, understanding this culture is absolutely crucial to evaluating the potential impacts it could or could not have on your business.
“No” versus “Low”
I like how many of us have begun to call this category the “no-low” category, rather than separating zero alcohol and low alcohol into separate factions. The benefit of this goes back to the behavior of those driving the growth of the category. As I mentioned in my first article on this subject, 51% of those choosing alcohol-free alternatives are doing so on the same occasion in which they are enjoying premium spirits. So, while we often refer to “no-low” as it relates to the ABV of a beverage, it could also be thought of as whether someone is choosing to be completely sober or is moderating their consumption — both by taking only certain days or weeks off from drinking entirely, or by enjoying one or two spirited drinks at a restaurant and then switching to something free-spirited.
What this means for everyone reading this is that we need to start rethinking how we’re considering, planning, presenting, strategizing with these products because it’s not just a small segment of the market anymore — it’s potentially everyone that walks through the door, depending on the day, time of year, or just what happens to be going on in their life. No longer is this category solely about the designated driver, pregnant woman, or recovering alcoholic (respect intended for all). No, people of all kinds are finding these options easily in the off-premise and DTC sectors, and if they’re anything like I have been this summer, they’re disappointed by the offerings in the on-premise. At least, what is (or not) listed on the menu.
How to Determine How Big the Opportunity is for You or Your Customers
The best news is that the easiest way to determine how much this should matter to your business is something you or your customer already have: a menu. Despite all the changes over to digital, QR, and mobile app ordering, the restaurant menu — however it’s presented — is still the number one marketing tool for any product offering and therefore a litmus test for most trends. There’s just one catch: you have to give it a strong effort in order to trust the performance is indicative of the potential.
Here are five pillars to think about with menu programming, whether helping your customers program your product, or focusing on a handful of units as a test:
- Menu Placement: depending on how many alcohol-free items you plan to offer; they should go into a section of their own or alongside their spirited counterparts. Never with sodas, bottled water, etc.
- Naming Categories and Cocktails*: use fun and/or modern ways to call attention to this category, such as “Free-spirited” (my favorite), “Alcohol-free”, or “Spirit-free” rather than introducing a negative connotation. With a cocktail, avoid using “mocktail” or “virgin” and instead create a name for this drink just as you would for any other cocktail.
- Variety & Options: I recommend three options at minimum. That could be three alcohol-free beers, or one beer and two cocktails, or one wine, beer, and cocktail. Determine what combination is best for your concept.
- Glassware and Presentation: use proper glassware just as you would with a spirited version of a beer, wine, or cocktail and provide an appropriate garnish, where applicable. Never use a water glass or pint glass for a free-spirited cocktail, for example.
- Pricing: alcohol-free items should be priced somewhere between sodas and spirited items, leaning closer to alcohol pricing than standard non-alc items. If you offer a thoughtful, free-spirited cocktail in a proper glass with a nice garnish, it is worth more on experience alone.
The Test: Watch the product mix over time. Almost certainly, any restaurant will sell more alcohol-free products than before, simply by following the steps above. But the true test is how many guests are “converted” from soda, iced tea, or bottled water over to a higher-priced free-spirited cocktail or beer. Not every convert will tell you this of course, so watch the check average to see if it climbs alongside the greater number of alcohol-free items being sold. If it does, then you can rest assured that many of those purchasing your newly marketed items were either soda and tea drinkers before or would have just ordered a club soda with lime, or perhaps wouldn’t have had another item at all.
It is only from the results of a proper menu test, tracked closely over time, that you can be sure how many of your guests are truly looking for a better offering, and willing to put their money where their mind is.
During my Free-Spirited Summer I’ve kept a keen eye out for good examples of menu programming of alcohol-free products, the best naming choices, the best presentation, how it’s listed on the menu, and where the effort was clearly put in. My hope is that this helps illustrate my points above and save you some time if/when you embark on something similar.
Dabble at Conrad Midtown — NYC
Listing the free-spirited options directly below the signature cocktails is perfect and labeling them “In the Spirit” is an awesome way to call attention to them positively. Note the pricing: just a few dollars below the spirited cocktails, and the Lavender Lemonade I tried was worth every penny — perfectly balanced and refreshing.
Use the arrows to view images
Carolina Crab Company — Hilton Head Island, SC
While they only had one alcohol-free item on the menu, Heineken 0.0, it was listed perfectly — right alongside the “regular” Heineken, rather than at the bottom of the list, which is often the case. Additionally, note how it’s slightly less expensive than Heineken, but still higher-priced than Bud Light and Coors Light.
The River House at The Montage Palmetto Bluff — Bluffton, SC
While not the most creative menu design I’ve seen, the listing of “Crafted Zero Proof Beverages” as the second item on the list, as well as right next to the “Craft Cocktails” is ideal. Additionally, the “Cucumere” free-spirited cocktail was absolutely delicious — one of my favorites that I have tried. (Also, note the pricing which I felt was 100% warranted for the product I received.)
Use the arrows to view images
Use the arrows to view images
Storico Vino — Buckhead Village, Atlanta, GA
An outstanding example of how to program and execute for the category was found at Storico Vino in Atlanta. Not only were the drinks perfectly executed, well-presented, and priced competitively, but they even used a handful of the new products on the market: Lyre’s Amaretti and Aperitif Rosso, and Wilfred’s alcohol-free Aperitivo. Both of these cocktails were fantastic, well-balanced, complex — and the best part is, sitting at the bar with several others — I didn’t feel the least bit out of place, or lacking in experience. Bravo, Storico Vino, bravo.
Stay tuned for my next article which provides a deeper dive into some of the best products in this category, how they rank against the “real thing” and their competitive set, and what to consider for variety, styles, and more. In the meantime:
Do you feel like your menu is already getting this right?
Please send me a copy, we would love to share any example with the masses.
Do you think I’m making this out to be a bigger deal than it really is?
Still not worth the effort? Please, reach out and let me know more about why you feel that way. I want to hear all perspectives!
Are you a supplier who is representing an alcohol-free brand?
Please let me know if you have not received my RFP/RFI for this space or if you would like to collaborate on more ways to sell your product(s) in national accounts.
Email Me: firstname.lastname@example.org
Mixologist Julia Momose wrote a fantastic “Spiritfree Manifesto” back in 2017 that articulates the reasoning behind positive naming conventions perfectly. She was quite ahead of her time!
Gabe is a 23-year hospitality industry veteran who, prior to joining IMI in 2016, spent the first 17 years of his career in restaurant and hotel operations, including corporate beverage program development, multi-unit restaurant oversight, fine dining general management, and Sommelier. For the past 6 years, Gabe has worked as Account Manager at IMI Agency leading the Hilton Worldwide business and helping drive several internal strategic initiatives. As Senior Account Manager, Gabe now leads a team at IMI focused on program development, marketing strategy, and building supplier partnerships. He is a Certified Food & Beverage Executive and Certified Sommelier (Level 2) with the Court of Master Sommeliers. He is passionate about all things beverage, coaching and training, and finding new ways to overcome challenges. A North Carolina native, Gabe lives just outside of Charlotte with his wife, Allyson, two boys, Truman & Ollie, and dog, Foxy. When not working on beverage-related projects or carting the kids to soccer practice, you’ll likely find him at a local car or watch enthusiast meetup or enjoying an F1 race.