Luxury

Affordable

Beverage professionals adapt cocktail

programs for cost-conscious consumers.
By Jack Robertiello

T welve dollar cocktail, meet the recession.

The on-premise beverage alcohol industry is nowhere near
the shambles of the automobile or banking businesses. But the
restaurant industry is tightening its belt in a manner unknown
for a generation. Traffic is down and companies are reporting
lower volume and disappearing profits.
This comes on the heels of a lengthy cocktail revolution that has
been based upon quality and innovation. The quality movement
has upgraded and upsold the drink experience. Experts wonder if
this revolution, once fueled by free-spending consumers, can hold
up in the face of a full-blown recession. As restaurateurs franti-
cally rethink growth plans and try to staunch bleeding profits,
will they cut back beverage programs to save money?
It is too early to know for sure. Nevertheless, some opera-
tors are carefully fine-tuning how they do business. Others are
introducing low-cost options. Most seem to be dealing with the
economy by tightening inventory, managing purchasing and
ingredient cost increases. While these measures nibble the edges
of cocktail programs, they do not undermine the years of work
put into enhancing the drink experience.
When the bar team at Shaw’s Crab House in Chicago de-
velops cocktails these days, they don’t focus on a specific base Shaw’s Crab House is testing the use of lower-priced spirits in cocktails such
spirit, says Steve Tindle, wine and spirits director for the 2-unit as its Cosmo above.

20 | march 2009 www.cheersonline.com

 Despite the recession, O’Charley’s plans to stick with the upgraded beverage concept it
successfully implemented last year, which includes its Pomegranate-Tangerine and Tangerine-
Grapefruit Margaritas (above) and the Cotton Candy Cosmo (right).
concept from Chicago-based Lettuce Entertain You Enterprises
(which also does beverages for the Thai-French fusion restau-
rant, VTK). Established cocktails have been checked to see
if swapping in lower-priced spirits brands has any impact on
flavor.
The Cosmo, still a big seller at Shaw’s, is one example of a
revamped drink. “We tried our recipe with several different
vodkas, at different price points, to see if changing [spirits]
affected the flavor,” notes Tindle. “In a blind tasting, we tried
it with high-end vodkas like Ketel One and Grey Goose in
comparison with Svedka.” The latter compared well and now is
the base spirit for the drink.
Switching out brands does not always work. For example,
Shaw’s bartenders could not find a pepper vodka to replace
Absolut Peppar in their signature Bloody Mary.
The bottom line is quality, Tindle says. “I don’t want them
to be thinking value first; I want them to be thinking about
creating a great drink.” While the cost of goods recently has
been above budget, Shaw’s is holding the line on prices.
But other operators are developing new drinks that put cost
at the forefront.
Recession Pricing
For the past few years, Uno Chicago Grill has been keeping
costs in line by carefully monitoring purchasing and inventory.
Recently, it began offering select by-the-glass wines for $4.99
22 | march 2009
each. It now is working on a cocktail program to accompany its
“Snack Hour” promotion, which offers smaller food portions
from $1.99 to $2.99 during happy hour and from 10:00 p.m.
to closing.
“Customers are being more careful with their dollars,” says
Marc Sachs, corporate beverage manager for Uno, which has
more than 200 restaurants in 31 states. “Yet they still deserve
the kind of experience restaurants offer, and that’s not just
feeding you.”
At high-end chain restaurants, controlling costs can take a back
seat to preserving quality, says Tylor Field III, vice president of
wine and spirits for Morton’s The Steakhouse, which has 78 units
in the U.S., plus five internationally. “In our luxury segment, we
can’t go from fresh cucumber to a powdered substitute.”
Morton’s current offerings incorporate fresh ingredients and
elegant twists such as the foam on their signature Mortinis.
Field says the drinks have established the chain’s reputation for
fine drinking as well as fine dining. Turning away from that
during tough economic times would send the wrong signal.
It also would be bad business. “The specialty drinks arena repre-
sents the fastest growing segment for us in all beverage,” says Field.
Like Morton’s, the O’Charley’s chain recently upgraded its
beverage program with positive results, introducing signature
Margaritas made with a tangerine-grapefruit mix designed
especially for the company. It plans to stick with the new strategy,
says Stuart Melia, corporate director of beverage operations.
www.cheersonline.com
 Morton’s The Steakhouse remains a firm believer in using top ingredients for all its drinks, including its Pomegranate Mortini (above left), while restaurants such as
Alexandria, Va.’s PX (above right) fight the urge to cut costs by delivering a superior guest experience.
“The Tangerine-Grapefruit Margarita did so well for us in
2008, it was second in revenue only to Bud Light Draft,” said
Melia. The success led O’Charley’s to introduce another signa-
ture Margarita made with pomegranate and tangerine.
Introduction of the $6.29 Tangerine-Grapefruit Margarita
and the $7.99 Cotton Candy Cosmo were part of a plan to
upgrade beverages, as was the addition of garnishes made
with multiple pieces of fruit and a custom-made glass. “A little
something extra” in the form of a shaker guests can take home
helps make the new Cosmo safer in the recessionary climate
and provides added value, says Melia.
Operation Streamline
Still, higher-end restaurants are not exempt from cost-cutting
in other areas. Where Morton’s once stocked 35 vodkas, for
example, the number now is closer to 25.
At Elixir in San Francisco, owner H. Joseph Ehrmann says he
has dramatically cut back purchasing to reduce inventory. “Like
a lot of people, I had this vodka creep. People are bringing you
all these vodkas to try, and suddenly you realize you have more
than you should.” He now features craft and locally produced
vodkas as a means of reducing carrying costs.
Keeping an eye on purchasing and managing inventory creep
is the focus for Cameron Mitchell Restaurants, which operates
14 units and seven concepts in five states. “We’re doing nothing
to trade customers or products down,” says Ryan Valentine,
director of beverage operations.
When the company recently expanded outside of its home
(and control) state of Ohio, Valentine asked his unit managers
to “make sure that we have the best prices and bigger drops for
the products that are part of our core drink menu.”
24 | march 2009
Valentine says taking larger orders on high volume products
and skipping the deals on slow-moving inventory is key. “We
may get [offered] a ‘buy three, get a fourth.’ While it sounds
good, that’s not something we go through enough to make it
a good deal.”
He encourages deals on high volume items as a means of
maximizing purchasing power. He also looks for cost reduc-
tions through smarter buying and implementation of more
thoughtful inventory control. And he plans to focus on pour
control to emphasize efficiency.
Some bars are turning to smart sales methods to please
customers and reduce inventory. Ehrmann at Elixir has a massive
stock of whiskey and Tequila. Lately, it has been selling down
inventory at bargain prices.
“I created a menu called the ‘Elixir Economic Stimulus Plan.’
It involves high-end, rare Tequilas and whiskeys, and some
rums that I have a lot of inventory in,” says Ehrmann. “Rather
than waiting for a long-term return, I’m slashing prices on some
really great sipping spirits.” Items that ordinarily sell for $23 a
glass now go for as little as $13.
For Todd Thrasher, sommelier at Restaurant Eve and PX in
Alexandria, Va., the fine dining and drinking aspect of the two
restaurants he oversees do not allow for much trading down.
“I honestly believe no matter what price point you’re working
with, if you provide an amazing experience, it’s valuable at any
cost and people are open to it,” he says.
Quality still has its place. At least in 2009.  l
Jack Robertiello is the former editor of Cheers. He has written for
the Food Network and publications such as the New York Daily
News and the Washington Post.
www.cheersonline.com