ITB 2024 Special Reporting
The Restaurant Business is Looking Up.
By KDM Global Partners, LLC
Saturday, 8th September 2012
Despite all the discouraging news during the past few years, the state of the restaurant industry is not quite as grim as it may sound.

While rising costs for food and fuel have dominated headlines, weighing heavily on the minds of restaurant operators, things are trending positive.

Consumers are Coming Back to Restaurants

There is no "new normal" of dining out less. To the contrary, people want to return as quickly as their pocketbooks will permit to the days of dining out more. As the economy improves, so will restaurant traffic. Dining out is seen as both entertainment and convenience - both of value to consumers and these numbers will improve as incomes begin to rise again.

Restaurants can Work Around Inflated Commodity Costs

Many restaurants have found a way to navigate rising food costs without making steep price increases. Operators have focused on cost-saving initiatives, menu engineering and efficient purchasing. Also, compelling new margin opportunities exist for restaurant operators, such as serving their own custom-label wines (see "Opportunities for Growth" below).

Consumers are Still Spending

Higher gas prices haven't hurt consumer spending dramatically, thanks to an improving employment picture and a payroll tax cut that begin earlier this year. Gas prices have also stabilized as the summer travel season gets underway.

There are Still Opportunities for Growth

Despite all the clamor during the recession that the US restaurant field was over-saturated, some operators are experiencing rapid growth. For others restaurants, there are pockets of under-exploited income-generating opportunities right under their noses - - most notably in their wine category.

Rather than serving the ubiquitous "national wine brand," a restaurant can have its own brand (private label) of wine to serve to customers.

The four (4) chief reasons why custom label wines are critically important to restaurants:


4Hoteliers Image LibraryThe first key fact about proprietary label wines is that a restaurant gets a "better bang for its purchasing buck." Better wine at a lesser price...plain and simple.

With the "national brands," the delivered case price will always include your pro-rata share of their (huge) advertising and promotional budgets, as well as the incentives they provide the distributors to get your restaurant to carry it on your menu! Not that there's anything wrong with the juice - but you're probably paying more than it's worth.

Your "house brand" wine will likely cost much less on a per-bottle basis, be much better wine (at any price point) ... and earn you better margins!

This is the case whether you're pouring wine-by-the-glass or bottle sales.


The data tells us that wine has now eclipsed beer in popularity (sales) throughout the US. People are increasingly turning to wine as their recreational beverage of choice; accordingly, consumers are learning more about wine and are becoming more sophisticated shoppers.

Restaurant customers are therefore much more familiar with retail wine prices than before. When they see a wine on the menu that they've tried before, they will also likely know the price at the wine shop down the street from the restaurant! Since restaurants often charge more than the wine shop, this can cause dissonance with the customer.

No restaurant wants to risk customer loyalty over this! When a restaurant serves its own PL wine, that wine is ONLY available at the restaurant. Thus, the price is the price - it can't be compared to the price at the retail wine shop, or on the Web! Everyone is happy.


Nothing breeds customer loyalty better than a house wine that is enjoyed by everyone ... and is only available at the restaurant. Repeat business is the hallmark of a successful eatery. What better way to bring them back than pouring your "own" wine, where that wine is ONLY available at your establishment?

Design some compelling wine labels that stand out beautifully at the restaurant. Leave them on the tables, at the bar and decorate with them! The restaurant's own brand will be substantially enhanced by the existence of your proprietary wines and add a touch of elegance and originality to the dining experience.

Your restaurant's logo will be cemented in the minds of your customers. Business is all about branding now. Do what you can to build your restaurant's brand.


The result of a private label program is that a restaurant's upfront investment in a custom

wine program is now similar to what it would have been in its wine menu, generally! But the difference for the restaurant is enormous - better margins, better branding and happier customers.

More information can be obtained here: www.kdmglobalpartners.com
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