The Shout Magazine (New Zealand)

Why cocktails make good business sense

Robert Brewer, Chief Executive of Spirits New Zealand, shares why cocktails are good for your on-premise business.

Robert Brewer

Cocktails are on-trend and growing in popularity

Cocktails have been growing in popularity both locally and internationally since the pandemic, and the trend doesn’t appear to be slowing. Increasingly consumers are choosing cocktails as their first drink over beer or wine.

According to CGA’s Pulse Reports, 35% of those surveyed said they’d had a cocktail in a bar, restaurant, or similar venue during the month of June 2023 compared to 22% in June 2022.

I was chatting to Mike Egan who owns Monsoon Poon, which has been an icon on Wellington’s Blair Street for 23 years. Monsoon Poon is evidence of this growth – Mike tells me that on a recent weekend, his team sold 600 cocktails, whereas two or three years ago, sales may not have reached half of that figure.

Part of the reason for this increase in popularity is the theatre and visual appeal of cocktails. Cocktails are more shareable on social media than any other drink – you’re more likely to see an Instagram post of someone with a fancy cocktail while lying on a sunset beach, or a video of a bartender lighting up the garnish of a flaming cocktail, than you would any other form of beverage.

As a venue owner, cocktails also make engaging, interesting, tasty-looking content for you to share on your own social media channels. Mike and his team have found this too, and you’ll see that a large chunk of content shared by @monsoonpoonauckland is cocktails, just because of their visual and engaging nature.

Monsoon Poon Auckland: Facebook

Cocktails are profitable

Not only are cocktails on-trend and popular, they’re also more profitable than beer and wine. Looking at the numbers, the average cocktail comes in at about 50% higher from a price point perspective, with an average margin of 8 more percentage points, and an incredible 68% higher gross profit. This means you’ll be averaging about $5.50 more gross profit per glass compared with other drink categories.

Then there’s the pulling power that cocktails have. Cocktails symbolise high-end or premium venues and occasions and can attract a generous and profitable customer-base. According to the OPUS: On Premise User Study , cocktail drinkers spend more money out of home, with the average monthly spend of a cocktail drinker being $214 per month, compared to a beer drinker at $203 per month, and a wine drinker at $201 per month.

The same study also shows that consumers are generally willing to spend more on cocktails on average per serve – $11.60 for a glass of wine and $9.82 for a beer, compared to $17.42 for a cocktail.

So now really is the time to capitalise on the cocktail by ensuring your venue serves high quality spirits and has a dynamic cocktail offering on the drinks list.

To help, here are my top tips for making cocktails a success at your venue:

• Adapt your cocktail menu with the seasons to keep ingredient costs down.
• Pre-batch your cocktails before service starts, or even at the beginning of the week. This means your bartenders can then simply shake with ice, pour, and garnish to order. This saves labour time, ensures quality and consistency, and may even enhance taste due to the opportunity for flavours to develop over time.
• Invest in training your staff on how to make – and sell – great cocktails. You’ll see return on investment with more people ordering your consistent, high-quality cocktails.
• Be known for a cocktail – make it your signature! This will become a reason for people to visit your venue to try it and become return customers.

Another tip is one that Mike picked up from a visit to Chicago. If you’re a restaurant and trying to encourage cocktail purchases, print your cocktail list on the back of the food menu and place the menu cocktail-side up on every second table setting.

The cocktail list is then in prime position to grab attention when diners are first seated and get them thinking about – and ordering – cocktails from the beginning of the evening. Monsoon Poon’s cocktails tripled in sales the very first night they did this, and they continue to use this strategy to encourage sales today.

How to catch up with The Shout NZ

Online, updated daily with its own unique content and breaking news.
Our weekly newsletter – free to your inbox! Subscribe here.
We are also on Facebook and Instagram!