Boosting sales with beer delivery

Operators are recouping dollars through off-premise booze.

Early buzz on the impact of beer and wine delivery for restaurants can be summed up in one word: cheers. As restaurants battle for market share and seek out creative ways to boost check averages, there has been a sudden uptick in the trial of beer and wine being delivered along with food. The interest isn’t concentrated in one type of restaurant, either; it’s being embraced by casual-dining chains such as Buffalo Wild Wings and BJ’s Restaurants, all the way to QSRs such as Pizza Hut.

Signs suggest that beer delivery has legs, as some chains report seeing incremental sales spike, and others say they plan to expand their programs. “If you can make it work, it’s something that’s a no-brainer,” says David Henkes, senior principal for researcher Technomic. But that does not apply to every brand, he cautions. It makes the most sense for beer-heavy chains that can support that positioning with options like delivery.

Buffalo Wild Wings is doing just that, testing beer delivery at 19 locations in California with hopes of expanding the service to other markets in other states, says Andrea Schwenk, beverage director. Initial results show that check averages increase about $10 on beer delivery orders, she says, and those beer sales appear to be totally incremental. What’s more, BWW’s beer delivery restaurants are outperforming those that only sell beer to go. And in those markets that offer both beer delivery and beer to go, she says, about 60% of the alcohol sold is from delivery orders. “We’re constantly looking for new and innovative ways to reach our fans and deliver them what they want, when they want it, where they want it,” says Schwenk.

And that’s obviously at home. The chain estimated its same-store sales were down 1.6% to 1.7% last year, according to its latest earnings call. Meanwhile, takeout sales continue to increase, representing more than 19% of the company’s sales in the third quarter ended Sept. 24, up from 17% a year ago.

While selling booze via delivery can make up for profits lost to third-party deliverers eating into margins, beer delivery isn’t without its challenges. BWW has learned that there’s still relatively little consumer awareness around beer delivery from casual-dining restaurants. In order to grow sales through this channel, the chain continues to focus on spreading word of its beer delivery. And it’s also expanding its alcohol delivery program: It’s testing wine and also allowing customers to make their own domestic or imported six-packs for delivery.

So far, beer delivery is most popular at dinnertime—accounting for about half of the orders. But there’s also a late-night bump after 9 p.m. that accounts for roughly one-third of orders, Schwenk says.

Meanwhile, Pizza Hut says it, too, plans to expand its new beer delivery program, although the chain declined to specifically discuss sales. “Who doesn’t love cold beer and hot pizza?” asks Stacy Lynn Bourgeois, director of marketing for Pizza Hut. And that pairing of temperatures was a key learning for the chain—Pizza Hut had to find coolers that would keep beer at the right temperature for delivery. So far, it’s worked, says Bourgeois.

The Pizza Hut test program, conducted in Arizona, will expand to additional Arizona stores by the end of January, says Bourgeois, including some in the Phoenix market. In February, Pizza Hut also will begin testing wine delivery, she says. The chain will test different size wine bottles as well as an expanded beer selection.

“Consumers love that it’s a one-stop shop,” says Bourgeois. Consumers also appreciate that besides delivering familiar national brands like Budweiser, Pizza Hut also is delivering local, craft beer favorites, she says. Pizza Hut currently has 1,600 stores with beer or wine.

One challenge for alcohol delivery remains the staff. Chains need to consider the age of the staffer working the takeout counter and fulfilling takeout orders, says Schwenk. BWW passes the responsibility of checking customer IDs, though, to its delivery partner, DoorDash. Because Pizza Hut uses its own delivery drivers and not a third-party delivery service, Bourgeois says there are actually fewer complications. Pizza Hut has had to train drivers how to check and verify IDs, but it is not relying on another company to do the checking.

While Bourgeois declined to state if or when Pizza Hut might roll out beer and wine delivery nationally, she did note, “Our goal is to roll out as quickly as possible.”

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