Booze on the menu

pizza with alcoholAustralians may still be recovering from a boozy New Years but fast food operators will be hoping the hangover doesn’t last.

That’s because alcohol is shaping up to be a key focus for the industry in 2018, as major players assess rolling out craft beer and wine in a bid to cash-in on increasing demand for dine-in quick service restaurant (QSR) experiences.

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The likes of Domino’s, Retail Food Group-owned Crust and Craveable Brand’s Portuguese chicken chain Oporto all look set to move on grog this year, following the success of small-scale trials carried out in 2017.

The move could shake up the traditional concept of fast food in Australia, following on from the success that brands like Mexican chains Guzman Y Gomez and Mad Mex have had in introducing consumers, particularly millennials, to a new type of fast casual dining.

Oporto, which has signalled that alcohol will be a key focus for the business this year, has begun engaging with franchisees to secure the necessary regulatory approvals to begin selling a curated range of craft beer in select stores and is also assisting with the provision of responsible service of alcohol (RSA) training.

The casual diner

CEO Craig Tozier says Oporto will be carefully selecting the stores it will provide the service in, with an eye on staying clear of higher traffic food court locations that are unable to offer the same level of experience.

“Customers are really asking us to provide alcohol and we’re seeing a number of competitors do that,” Tozier tells IRW.

“Millennials particularly enjoy coming into our restaurants in the evening and if someone is dining in, supplying alcohol is just a natural adjacency for our sector.

“As housing prices go up and the average consumer is struggling to spend money on food, being able to trade out from more expensive restaurants into what is typically a reasonable level of restaurant that we and our peers provide is a great experience for the customer.”

Restaurants account for a significant amount $17 billion alcohol market in Australia, according to IBISWorld data, while the amount of alcohol being consumed by Aussies increased for the first time since 2006-7 last year – driven largely by an explosion in demand for craft beer.

While Oporto is focusing on dine-in customers, gourmet pizza brand Crust hopes to sell a curated craft beer range on its delivery orders, a move that Crust general manager Renee North says is a natural fit given the way the market is heading.

“Pizza traditionally tends to be more of a dinner occasion, rather than throughout the day. Obviously it’s also very prevalent for delivery in the evenings, so from a consumer perspective, customers are much more likely to be enjoying a beer or a glass of red wine with their pizza on a Friday night as opposed to a soft drink,” she says.

Crust is already offering James Squire and Little Creatures beer, alongside a selection of red and white wines from select stores in Melbourne and on the Gold Coast.

Pizza market leader Domino’s launched its alcohol-enabled dine-in store in central Brisbane last year, focusing on a more premium product that runs right into the type of offer that Crust provides.

The ASX-listed giant has plans to open a range of the new premium concept stores, having indicated an intention to expand last year.

The ‘restaurantification’ of fast food

For food industry consultant and managing director of Future Food Francis Loughran, the industry shift is representative of a much broader sea-change in consumer dining habits that have originated overseas and are now making their way into the local market.

“Where the competitive world of QSR is today, the modern brands and hospitality groups, from Mexican to burgers to Thai and Japanese…they’re catching up, because they want to be recognised as restaurants.”

The so-called ‘restaurantifiaction’ of food is progressing, according to Loghran, who said that while alcohol won’t become a replacement for the core QSR offering, it will increasingly become a fixture of modern experiences alongside heavier investment into stores and better quality food.

“There are three directions. Number one, the quality food is improving. Secondly, the introduction of alcohol offers a more complete service, while the development of design-driven environments means spaces are beautiful inside and out,” he said.

“It’s all about the building blocks that allow a range of QSRs or brand name hospitality groups to have a competitive edge and alcohol is just an extension of that.”

Investment in stores has become an increasingly common theme among QSR players over the last few years, particularly as centre landlords redevelop food courts to cater towards demand for casual dining.

Oporto has itself refurbished dozens of stores to cater to audiences that are increasingly interested in dining in, which makes grog the next step in a broader evolution.

Although there is one challenge that stands before QSR operators and the widespread adoption of beer, wine and spirits in stores – regulation.

Tozier and North both admit that securing liquor licenses so far has not been easy, with Loughran noting that many in the community are critical of restaurants that have traditionally been seen as family destinations looking towards alcoholic beverages as a revenue channel.

 

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