Marketing Matters Newsletter (June, 2004)

Operators raise bar with signature drinks, new beverage menus

By Liza Berger

Years ago having a drink with dinner usually meant a coffee or a cocktail. Today the coffee might be a cafe latte and the cocktail might be a chocolate Cosmopolitan.

Finding innovative ways to improve drinks and beverage menus is an important driver of success in the restaurant industry. Stand-alone drink menus, clever promotions and signature drinks are all popular ways in which restaurants sell more drinks and give their reputations an extra kick.

Signature drinks are a sure way to increase alcohol sales, according to Philip Raimondo, director of development and training for Patrick Henry Creative Promotions, a full-service marketing agency in Houston that specializes in food and beverages.

Il Fornaio Restaurants, a 24-unit operation based in Corte Madera, Calif., has its own brand of Chardonnay from California and Chianti Classico in Italy.

"Make a drink that looks great, walk it through the restaurant and people are going to buy it," he said.

But not just any drink qualifies. A signature drink today has to have a secret recipe or a unique theme that matches the restaurant that sells it, Raimondo said.

In many cases signature drinks put restaurants on the map. Rio Grande Mexican Restaurant, a five-unit chain in Colorado, serves a variety of Tex-Mex entrées, but its draw is its margarita. The drink is a potent but tasty drink that has created a buzz all around the state. It won best margarita in Denver on Citysearch.com last year.

The drink was developed at about the time the chain opened, in 1986. The owners experimented and came up with a unique margarita mix, said Christine Sullo, director of marketing for the chain. Since then word of the drink has spread.

"It took on a life of its own," she added.

One way Rio Grande Mexican has perpetuated the popularity of the margarita is through a marketing campaign. "Limit Three," is a campaign to promote responsible drinking. Restaurants try to limit the drinks, each of which contains three to four shots of liquor, to three per person. The restaurant created a trademark logo for the campaign that is a neon sign with a margarita glass featuring a three at the top of the glass.

While the purpose of the campaign is safety, the "Limit Three" also has peaked people's curiosity, especially those of the college-age set who are under 21. When they hear about the "Limit Three" from their older students, they make the Rio a destination when they become of drinking age. Then, at graduations, they bring their parents.

Besides advertising the drink through its campaign, the restaurant has managed to keep the allure of the drink by not giving away the recipe and by containing sales of the beverage to the restaurant. The mix is not available for sale at grocery stores.

"It's about experiencing it at the Rio," Sullo said.

In some cases taking a beverage and refining it for a restaurant can do magic for business. John Imbergamo, president of the Imbergamo Group, a public-relations and marketing agency based in Denver, said Dixon's Downtown Grill, an American family-style restaurant in downtown Denver was experiencing sagging sales and a bit of an identity problem before it improved its margaritas about five years ago. The restaurant's owners along with the Imbergamo Group started offering new flavors and enhanced the drink's presentation by serving it in a shaker. Sure enough, it was a sensation, Imbergamo said. Today there are several flavors, including one made with jalapeño jelly.

"It really did wonders for business," Imbergamo said. "It's an example of taking a beverage product . . . and trying to focus on it, refining its presentation and using it as a marketing tool."

Some Italian chains have boosted their sales with extensive wine lists and beverages that complement an authentic Italian meal.

Il Fornaio Restaurants, a 24-unit operation based in Corte Madera, Calif., prides itself on its own brand of Chardonnay from California and Chianti Classico in Italy. Every restaurant has its own reserve list of 20 to 100 wines. It also sells more than 100 different spirits. The restaurants have retail sections where wines are sold.

Michael Beatrice, chief operating officer of Il Fornaio, said 67 percent of sales come from food. The other 33 percent come from alcohol sales, and wine comprises a large portion of the alcohol sales.

To boost wine sales, the chain employs creative selling techniques. One promotion occurs two weeks of every month, when Il Fornaio offers its Festa Regionale where a chef at the chain makes a special menu from a select region in Italy and matches it with wines from that region. Patrons can choose food from this inserted menu along with the wines.

Another Italian restaurant that has a sophisticated wine list is Olive Garden, a 527-unit chain based in Orlando, Fla. Earlier this month the chain announced that it had bought an entire vintage of 2002 Bottega Vinaia Chardonnay from Italy and is selling the vintage — 3,300 cases — until it runs dry.

It also introduced a new wine and beverage menu that includes such unique beverages as a sour-apple martini. Last October it introduced a new signature Italian roast coffee blend and service called Caffe La Toscana and said it changed its coffee brewing, holding and serving standards. The chain is known in the industry for its beverages.

"Enjoying a glass of wine with your meal and finishing it with one of our many coffee selections is part of a genuine Italian dining experience, and Olive Garden places a priority on that," said Mara Frazier, a spokeswoman for Olive Garden.