On-Premise Chain Account Profile: Winking Lizard Some Stats May Surprise

Dear Client:

It’s a 28-year-old, 14 outlet chain of taverns in Ohio, but don’t let its tight distribution fool you. Winking Lizard Tavern (WLT) is tied to be Dogfish Head’s No. 1 on-premise chain account in the nation, and in the top 3 for Labatt Blue (WLT operations veep John Lane says the beer and his chain grew up together). It’s the biggest chain customer, period, for local Great Lakes Brewing, and Merchant Du Vin’s largest account for Orval in the states. There are some 900 employees in the WLT system. So far, there are no plans to break out of the area.
The chain serves a full menu, along with beer, liquor and wine, with a 60/40 food-adult beverage breakdown.
BEER BUYING INTEL. John Lane has been a beer buyer for the regional chain for about 16 years. For the more recent half of them, he’s done a yearly audit – now always during Cleveland beer week – where brewery reps come to hear about numbers and business direction. It’s important to do things this way, John says, as many breweries are short on inventory, and sales reps are busy. “You have to make sure you’re getting your fair share. Supply, chasing beer – that’s tough.”
BESTSELLERS. Overall, draft’s way up, domestic bottles are something of a sinking ship, and craft and import bottles are flat. “The biggest growth we’re seeing, of like 20 percent the last 3 years, is the draft segment,” John says.
He divides his beer P&L into domestic bottle beers, draft, and craft-import lumped into one group. The best-selling draft is Miller Lite, then Labatt Blue (which they’ve had on tap for 28 years, as LB and Genesee were the first and only two draft beers WLT first carried). Then comes Bud Light, and then a jump to craft with Dogfish Head 90 Minute, and Great Lakes’ Dortmunder.
On the bottle side, Corona is the No. 1 seller, then Blue Moon cans, and Alltech Kentucky Bourbon Barrel ale.
PUSHING VOLUME. Many of the bestselling and year-round taps are actually down from prior years, having lent some share to seasonals, which largely account for draft’s growth. To ensure the tap real estate continues to build the brands of his standard draft offerings, John will replace the ol’ faithfuls- say, Dogfish Head 90 Minute – with a one-off keg or seasonal until its out, then put the other back on. (This is an issue we’ll address next week at the Summit during our craft panel: Does craft flagship branding have the flu? Or do seasonals and in-and-outs enhance the flagship brand’s appeal?).
It takes a “shitload of execution” to do it this way, but the upside is volume, as the more drinkable, bigger-pour beers always stay on longer. The 20,000 Facebook friends and additional 20,000 they have on e-mail retainer ensure the one-offs sell out quickly.
PAIRINGS upSELL. Suggested beer and food pairings can cause a 5% – 75% sales spike, depending on a beer’s drinkability, John says. So they make it a point to call out beer pairings on seasonal food menus, like the Eliot Ness amber lager they currently recommend with their muffaletta special, which is some sort of sandwich I’m told.
For the past three years, Winking Lizard has brought in 400 pounds of Orval cheese to top their Kobe beef burger. [Ed. Note: Orval cheese is produced by the celebrated Cistercian Trappist Abbey in Belgium, which also makes beer]. This signature Orval Bistro Burger has obvious implications for the beer companion. This year they’ll also use the beer-infused cheese in new dishes.
POINT OF DIFFERENTIATION. Building loyalty, as we all know, is key. The 28-year old chain also boasts a 25-year-strong World Tour of Beers program to not only encourage loyalty but also reward those customers who try 100 of 300 rotating beers from around the world. “Last year we had about 5,800 members and the highest completion rate ever – right around 3,000,” John says. “It’s a give-back. We have four parties for [graduates], our biggest is in downtown Cleveland.” The last one had 1,500 attendees.

BEER BRIEFS:

MILLERCOORS IS EMBARKING on a $13 million warehouse expansion project at its Virginia plant. The brewery broke ground two weeks ago on the 175,000-square-foot addition, which will allow the brewery to store over 14k pallets at the warehouse. Currently, the plant shares an off-site distribution center with another company because the warehouse lacks the necessary storage capacity.

IN HIS ANNUAL LETTER to investors, Berkshire Hathaway chairman Warren Buffett signaled that he’s ready to spend some money on major deals. “We’re prepared. Our elephant gun has been reloaded, and my trigger finger is itchy,” he wrote. While he’s no doubt talking about mega-deals in the billions, we think Buffett’s McLane division will be running a slide rule over the financials of smaller wine and spirits distributors, and maybe even beer distributors. This will be a development to watch.

BREWPIC OF THE DAY. A-B’s Cartersville GA plant produced 25k cases of drinking water last week, plant gm Robert Haas told NPR Atlanta, in the event that melting snow creates flooding. “The time to be prepared for a disaster is before it happens. So, we hope that this water doesn’t have to get used. We hope that we can bring it back and recycle it. But, in case it does have to get used, we want to be prepared.” It actually takes longer to produce water than beer. “It’s a little bit more difficult actually. You know, beer is carbonated. Running non-carbonated products takes a little bit longer, so we slow the lines down a bit. But, it’ll take about eight hours to run on one of our lines, but well within our resources.”

Until tomorrow, Harry

“I prefer the company of peasants because they have not been educated sufficiently to reason incorrectly.
– Michel de Montaigne

– BEER SUMMIT SOLD OUT. But to see the schedule for the Beer Summit at the Fontainebleau Hotel in Miami on March 6 – 7, 2011, click here: http://www.beernet.com/beersummit/2011/BeerSummitSchedule2011.pdf

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