Alcohol delivery can be a boon for eateries as off-premise dining grows
The number of diners who opt to eat restaurant meals at home or on the go continues to rise, and the trend extends to just about every sector -- from quickserve to fine dining. Almost three-quarters of quickserve purchases are consumed off-premise, and nearly half of fast-casual meals and 16% of casual dining meals are eaten away from the restaurant, according to 2017 data from the NPD Group. As more traffic moves off-premise, offering beer and wine delivery can give restaurants an opportunity to add high-margin alcohol sales to delivery orders.
Pizza Hut launched a pilot program for beer delivery in 2017, and earlier this month the chain announced it will expand delivery tests to additional markets. The expansion includes more locations in the original test markets of Arizona and California, as well as new locations in Florida, Iowa, Nebraska, North Carolina and Ohio for a total of 300 stores offering beer delivery. The chain plans to increase that number to 1,000 stores by this summer, USA Today reported.
“You order a pizza and you get a six-pack of beer with it, that’s a game-changer, because alcohol sales, where we get most of our profit, are no longer going to be limited to just that on-premise market,” Adam Hasley, director of advocacy research and insights for the National Restaurant Association, said in a presentation at the 2018 Restaurant Innovation Summit.
During his overview of industry trends at the annual conference, held last November in Dallas, Hasley identified alcohol delivery as a trend with major growth potential.
“It’s going to be big,” he said. “And it’s still early right now where a lot of restaurants have the potential to invest in the infrastructure necessary to make this work.”
Early adopters who have been able to make it work for their brands are reporting promising results from alcohol delivery. For Buffalo Wild Wings, beer delivery boosts check averages about $10 on those orders, Beverage Director Andrea Schwenk told Restaurant Business. In California, where the chain is testing beer delivery at 19 restaurants, those locations are outperforming those that only sell beer to go.
“If you can make it work, it’s something that’s a no-brainer,” David Henkes, senior principal for researcher Technomic, told Restaurant Business.
For operators who think alcohol delivery could work for their restaurant, the time to start testing is now, Hasley said. He noted the lack of federal regulation around alcohol delivery, and said eateries should take advantage of markets that don’t restrict alcohol delivery.
“Currently when it comes to policy, you have states having their own policy, sometimes no policies at all, which allows a lot of room for testing on this,” he said.
More states will likely pass laws around alcohol delivery as the service gains prevalence. Most regulations are concerned with making sure customers are of the legal drinking age. Pizza Hut trained its delivery drivers how to check and verify IDs, and new technology could make ID verification easier.
Louisiana recently introduced a digital driver’s license that drivers can access through a smartphone app created by Louisiana-based software development company Envoc. Law enforcement and the state Office of Alcohol and Tobacco Control accept the digital ID, and Envoc President Calvin Fabre hopes it will help usher in alcohol delivery in the state. “We think that this is going to help us pioneer alcohol delivery with Waitr and Uber Eats,” he told Government Technology.
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