Let’s hope Yard House, Hofbrauhaus and other beer-centric restaurants make a bundle off Oktoberfest this year. These operations are coming off a summer during which the on-premise beer category recorded a year-over-year decline.
The reason for the falloff? Beverage analysts suggest the no- to slow-growth economy caused consumers to rein in discretionary spending. The effect of these cutbacks really hit home over the past few months.
Based on data from beverage transaction tracking firm GuestMetrics that compared year-over-year volume for beer for the four-week periods through 6/16/13, 7/14/13, and 8/11/13, beer in casual restaurants decelerated from -2.9% to -4.0% to -5.6%; in fine dining, beer volumes softened from +0.3% to -2.1% to -2.6%; and in bars/clubs, beer volumes showed the sharpest decline, going from -2.6% to -4.3% to -6.4%.
In contrast, sales volume trends for spirits and wine improved slightly during these same periods.
“Beer’s loss of alcohol share has accelerated over the past few months, and saw its worst share loss in mid-August since the very beginning of the year,” says Brian Barrett, president of GuestMetrics. “As we’ve written about extensively, restaurant and bars have generally been having a tough 2013 as much of the broad consumer base remains under economic pressure, but unfortunately the beer category has been under-performing overall on-premise and alcohol trends throughout much of the year, with this quarter on pace to be the weakest of the year.”
Let’s hope these soft numbers turn around soon, because the number of beer-focused operations continues to increase. We’re still seeing plenty of brewpubs and gastropubs and other suds-friendly restaurants open their doors. But a couple of chain operators are going bigger, opting for a super-size approach.
Check out the stats on the latest Yard House from Darden. Located in Cincinnati, it sports an impressive 180 taps. Yard House will need that many when filled to capacity, because this 14,000 sq. ft. restaurant seats 514 guests inside with room for 199 more out on its patio.
Darden will open another Yard House outside Boise this fall and is on track to add five additional units next year. The new locations will be in Miami, Las Vegas, Minneapolis, Orlando and Portland, OR. The concept had 39 units when Darden acquired it last year and has plenty of room to grow.
Yard House is following roughly the same expansion pace as Hofbrauhaus. This German-themed brewery concept has just four units now (Cincinnati, Las Vegas, Pittsburgh and Chicago). Four more are scheduled to come on line soon, located in Cleveland, Milwaukee, Columbus and Buffalo. The Cleveland unit will feature a 660-seat hall and a 1,000-seat outdoor beer garden. Plenty of German food plus beer brewed to German purity standards make an evening at Hofbrauhaus feel like a trip to Europe.
Restaurants built on the grand scale of these two have plenty of seats to fill. Let’s hope beer drinkers nationwide start opening their wallets again so Yard House and Hofbrauhaus can fill them.