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National Restaurant Association - Pouring profits: Millennials & adult beverages

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Pouring profits: Millennials & adult beverages

Quenching the millennial generation's thirst for adult beverages can build traffic, sales and loyalty for your restaurant, but success requires an understanding of the demographic's quirks.

Here, Technomic senior director Donna Hood Crecca explains information associated with Americans between the ages of 21 and 34.

  • Known as "millennials," this generation numbers more than 68 million and is the largest since the baby boomers. It’s also the most diverse both in terms of ethnicity and life stages.
  • The millennial cohort currently has the lowest level of employment and is the lowest-earning generation, yet is expected to have the highest spending power of any generation due to its sheer size.
  • Millennials are projected to be the most highly educated of any American generation, and not just in terms of formal education; millennials are globally aware and constantly processing reams of information made available by the internet.
  • Raised on gourmet coffee and the internet, millennials are knowledgeable about food and drink; they’re demanding patrons, seeking a unique experience, customization and authenticity. They like to explore and discover new flavors and products.
  • They are frequent users of foodservice, yet are financially pressured, so are looking for value and promotional pricing. In fact, 54 percent seek out low prices so that they can visit restaurants more often, according to Technomic's research.

How can restaurant operators attract and satisfy a generation that’s knowledgeable about food and beverage, demanding of the experience and also looking for value and attractive pricing? The answer can be served up in a glass. Based on what we know about millennials, here are five ways to attract and engage this dynamic and demanding generation through your drink program:

  1. Image
    Mix it up. When in restaurants, millennials prioritize adult beverages and look for variety. More than two-fifths of millennials (46 percent) surveyed for Technomic's Trends in Adult Beverage (TAB) reports look for restaurants to offer a variety of beers, one-third (32 percent) prioritize wine variety and half (50 percent) prioritize variety in spirits and cocktail offerings. Older millennials (25-34 year olds) over index for prioritizing beer and wine variety. Creating adult beverage selections that present variety appeals to millennials’ desire to explore.
  1. Quick learning curve. Millennials are unlike any previous generation in their knowledge of adult beverages, and are thirsting for more. They’re adopting wine at a younger age than their parents did, with many interested in working their way through various varietals and regions. Although vodka is their favorite spirit, they’re imbibing rum, tequila and whiskey as well, diving into the different aged and flavored expressions of these spirits. Observers credit millennials with driving the craft beer and cider trends. Satisfy their interest in spirits, wine and beer by ensuring bartenders and service staff can speak to the flavor profiles, production methods and origins of your drink list’s various offerings with authority.
  1. Focus on flavor. While it’s true that millennials have a sweet tooth, evidenced by the growth of dessert-flavored vodkas, sweet is often an entry point into an adult beverage category. The millennial flavor portfolio is much broader than one might expect, typically ranging from sweet to spicy, and flavor often drives their drink selection. In wine, millennials gravitate to sweet reds and Moscatos, but will also move into more complex varietals and styles with some guidance. Calling out the flavor nuances in various whiskeys on your drink menu alerts them to intriguing elements such as hints of spice, tobacco and vanilla that will pique their interest. Millennials do look for seasonal beers, but will also seek out hoppier IPAs or other more assertive styles.
  1. Showcase what’s new at the bar.   Compared to other age groups, Millennials are most likely to try a new drink, according to Technomic's research; while 8 percent of the general population tried a new drink on their most recent occasion, 18 percent of younger millennials (21-24) and 12 percent of older millennials (25-34) did so. Differentiate your restaurant by offering innovative new cocktails involving the latest flavored rum introduction, the latest limited-edition beer or a recently released wine. And be strategic about how you present the new offering, as the power of suggestion works with millennials. The following are the top factors influencing millennials’ decision to try a new adult beverage:
  • Menu descriptions, promotions and POS materials
  • Sample from the server or bartender
  • Suggestions of their cohorts or the bartender/server
  1. Do all this – at an attractive price. Here’s where it gets tricky. Millennials have the least discretionary income but are demanding in the flavor and experience department. To satisfy both, engineer your drink menu carefully. Provide a variety of products and flavors with an eye toward driving high-volume/high-profit beverages while also offering unique libations that set your drink program apart from the restaurant across the street. Be strategic in your drink promotions (adhering to local regulations regarding such promotions). Millennials are often on the look-out for special events, special drinks and special pricing. One way to create that triple play is to develop a new cocktail involving a recently introduced spirits product, one whose roll-out is being supported in consumer and social media by the supplier. Keep the drink fairly simple to control your costs: focus on showcasing the flavor of the new spirit, perhaps pairing it with a familiar but low-cost mixer, but add a unique garnish for an interesting twist. Price it attractively. Where legal, look to the wholesaler or supplier for promotional support of the drink on the menu or via POS materials, or even of an event tied to the new drink that will drive traffic into your restaurant and promote trial. Such programs signal to Millennials that your restaurant is a place to have new experiences and try new things, and to do so at a great price point.

Millennials are a challenging generation, but with the right offering, its members will embrace one of the more profitable sections of your menu: adult beverages.

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