
And Results are Encouraging - Cash is king and everyone's stash of cash is suffering right now - regardless of where we reside, our earnings history, profession, demographic or other station in this volatile economy.
With consumers' individual net worth suffering, business forecasts diminishing for the near term and nationwide unemployment predicted to soon reach to 10%, Americans are ratcheting back their discretionary spending.
Restaurants - and all other on-premise wine servers - are being hit hard. This category includes hotels, resorts, caterers and corporate meetings/events.
Smart businesses are now taking measures not only to survive this downturn but to prosper. Yes ... you heard correctly: to prosper during the downturn.
Those restaurants that are paying closer attention to their wine category now understand and recognize certain "inalienable facts" that will make the difference between surviving and prospering in this marketplace - or dying: (1) Diners - even expense account customers - insist upon value; (2) Cultivating customer loyalty and repeat business is imperative; and (3) Differentiation from the competition is critically important.
Restaurant and hotel owners are now using their wine offerings to accomplish all three (3) critical objectives. No longer taking this product category for granted, they are using it for these important "survival techniques" - as well as vehicles for enhancing profits and growth.
Here's a few ways how:
"Sticker Shock" - It isn't uncommon for restaurants to earn 300% margins on bottle sales. And now, when a customer recognizes a product he/she already knows on the wine list, it's plain to see they are "overspending," compared to what they could buy the bottle for down the street at the local wine Shoppe.
In this economy, customers are not happy with this reality. Better not to create dissonance with your restaurant patron - you do want him to come back, right? Restaurants are now serving their own custom label wine brands - the wine is ONLY available at this place of business.
The profit margin earned by the restaurant owner is, thus, non-transparent. While the margins earned on these bottles are typically HIGHER, the customer isn't aware of it - and always enjoys the wine.
Higher Margins on Wines Sold. The well-known "national" wine brands (you know their names...no need to point fingers, right?!) enable wine retailers and restaurants to earn very predictable levels of profits. It's a competitive business, and especially among those brands that are ubiquitously sold.
Enter custom label (private label) wine brands. Not only are these wines better wines, dollar-for-dollar, for the consumer - but restaurants and retailers earn much higher margins on these wines than what they are used to earning. In dour economic times like these, these profits are a welcomed substitute for diminished business and have been enabling restaurants to stay afloat - and even gain market share!
Better Branding of the house always results in customer loyalty and increased repeat business - as well as effectively cultivating new business. There is no better way to differentiate your restaurant from the competition (i.e., "branding") than serving a wine everyone enjoys that cannot be purchased elsewhere.
Not only do you become the "only game in town" for this wine but the packaging (wine label) also displays your restaurant's logo or moniker and has the ability to "travel" if customers take the product home.
More information can be obtained here: www.KDMGlobalPartners.com