Increase Check Size by Encouraging Premium Beverage Orders
Across all food and beverage, upgrading to premium choices is a big growth driver for sales. And across markets, certain attributes drive premiumization: High-quality, convenient, unique, indulgent and purpose-driven products see the greatest success in convincing consumers to trade up to a premium product. Those same principles apply in restaurants—and for operators, encouraging diners to trade up will help drive category growth.
There are four pillars of the IGNITE initiative:
Perfect Your Category Fundamentals / Having the right product assortment on draught and in package, at the right price, featured on the menu in the right way.
Invite In NEW Drinkers (of 21+) Into the Category / Target adults of legal drinking age who are new to purchasing alcohol with approachable, easy-to-drink, flavor-forward products.
Expand Frequency By Winning With More Styles In More Occasions / Build programs and point of sale materials that activate against the key drinking occasions to increase frequency.
Drive Trade Up Within the Category / Drive trade up by featuring the right products and highlighting the right attributes to encourage people to treat themselves or purchase higher end products for celebratory moments.
The final pillar in this strategy, Trade Up, recognizes the potential to drive purchases by showcasing more premium beers, and is focused on helping restaurants increase the frequency that diners choose these options. Two growth drivers are foundational to this pillar: Trading up 21 – 39 year olds seeking products with the right badge value, and encouraging 40+ males to treat themselves with products that tout high quality ingredients and heritage.
Key demographics drive growth
Finding opportunities to expand the prestige segment begins with identifying what drives a consumer’s decision to trade up and activating with the right products and messages to meet their needs. According to Anheuser-Busch research, adults 21 to 39 years old and men 40 to 65 years old are especially lucrative demographics on which restaurant operators can focus growth via trade up.
Growth drivers for Trade Up
- Image Matters: In a nutshell, the key to activating trade up among adults 21 to 29 years old is focusing on image. They tend to select a beer that helps them to express themselves, and if they trade up, they’re likely looking for a way to reward themselves or to enjoy a small luxury as a treat. For this group, providing a beer with a high badge value that justifies a higher price is essential. For restaurant operators, highlighting limited edition, purpose-driven or uniquely special products can help convince these consumers to splurge.
- Social Treat: For men aged 40-65, premium beer is best marketed as a social treat. A beer that signals success, provides a special treat and serves as something to share with others and connect over is likely a beer these men see as worth trading up for. Promoting a premium beer as a sophisticated beer worth sharing is key. Restaurants that leverage social occasions as an impetus to trade up can see significant growth in this consumer demographic.
Insights into different consumers’ habits are essential to informing which products a restaurant offers and how they market them. Anheuser-Busch research finds that consumers tend to fall into one of two categories: the Occasional Splurgers (about 76% of the population) and the Always Fancy (who make up the remaining 24%).
Occasional Splurgers tend to reserve their premium alcoholic beverage purchases for special occasions; therefore, focus on “capturing the celebration” by honing in on holiday or occasion marketing that encourages premiumization to celebrate new occasions.
While a smaller demographic, the Always Fancy consumers drive 70% of growth in premium beverage sales; for these consumers, premium beverages are a routine order rather than a special-occasion splurge. Elevating the dining experience can encourage trade up among these consumers.
The IGNITE strategy suggests a few tips for driving trade up:
- Offer tasting events to circumvent guests’ hesitance to try something they aren’t sure about.
- Run occasion-based promotions to encourage diners to trade up for a special occasion, such as birthdays, sports games or other social events.
- Place signage in the restaurant and on tables to spread awareness about new and exciting drink options.
- Provide education and recommendations to address the top barrier to trade up—lacking knowledge on how to best enjoy a premium drink—with information on what glassware and serving temperature best suits each beverage.
By understanding the factors that convince consumers to trade up to more premium beverages, operators are well-equipped to provide their guests with the drink choices they’re interested in—and in turn, can enjoy a boost in check averages. For tailored insights and recommendations to encourage trade up in their own stores, operators can contact their local Anheuser-Busch Category Management representative.