Where US cocktail prices are hitting the top shelf

Drinks at low- and high-end restaurants have gotten more expensive as customers try new brands.

By Jason Notte May 9, 2013 7:17AM
Woman holding martini cocktail at a bar (copyright mediaphotos/E+/Getty Images)Don't blame rising cocktail prices on elderflower, bitters or the guy behind the bar with the curly mustache and vest who calls himself a mixologist. Blame the harried parents at the alcohol-slinging family restaurant across town or the expense-account boozers at the white-tablecloth joints in the financial district.
 

Restaurant Sciences, a Massachusetts firm that tracks food and beverage sales across North America, says the average price of a cocktail hasn't changed much at casual dining spots, bars or nightclubs over the past six months. But at family dining, fine dining and "upscale casual" establishments, prices have jumped 4.5% to 11.2% during that same span.

 

So what do the folks who pay less than $40 to feed a family have in common with the swells who don't even consider it dinner if they haven't broken a Benjamin? They're both bar novices who are into trying new things, according to Restaurant Sciences President Chuck Ellis.

 

"We believe that the increasing price of spirits is the result of a mix of moderate price-taking by operators in the upper and lower tiers, combined with some upward product migration or experimentation by consumers," Ellis says. That assessment probably goes down like a fine scotch at Diageo (DEO), whose premium brands -- including Tanqueray, Ketel One and Johnnie Walker -- benefit as consumers venture higher up the bar shelves.

 

Ellis adds that it's mostly smaller establishments and not chains like Texas Roadhouse (TXRH) or Darden's (DRI) Red Lobster that are raising prices. "Independent restaurant operators are driving the spirits' increases, since the chains are far more prevalent in midscale casual dining, where prices are holding steady," he says.


Think you can beat those price hikes by switching to a nice glass of wine? Sorry, MSN moneyNOW picked through some of Restaurant Sciences' other data and found a similar pattern in wine pricing.


The study reports that, on average, midprice, casual-dining restaurants raised the costs of their vino by a little less than 2%. High-end, "white tablecloth" establishments -- think Ruth's Chris Steak House (RUTH) -- posted an average 5.35% increase. But the biggest jump was found at affordable family-dining venues, where the price of wine served climbed an average of nearly 8.4% in six months.

 

Granted, wine is derived from a fixed commodity that can take a beating if the weather patterns shift in the wrong direction. Global wine production dropped 6.1% last year to its lowest point in nearly four decades after weather conditions worldwide damaged grapes. Yet America's taste for wine hasn't waned. Consumption of table wines reached 749 million gallons last year, or about 2.73 gallons per U.S. resident of legal drinking age.

 

Not that supply and demand don't take their toll on spirits prices as well. Back in February, the Distilled Spirits Council announced that overall sales of U.S.-made liquor by companies like Beam (BEAM) and Brown-Forman (BF.A) grew by 3% last year, with supplier revenue up 4.5% as consumers moved to higher-end products and embraced small craft distillers.

 

More on moneyNOW

24Comments
May 9, 2013 12:22PM
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Whenever I look at a restaurant menu that includes mixed drinks, the prices of those drinks are never indicated.  Why is that?

 

You wouldn't order a filet mignon w/o knowing its price...why would you order a Long Island Iced Tea w/o knowing how much it's going to cost?

May 9, 2013 2:30PM
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Stay home, cook your own food to exactly your own liking, pour your own drinks (I love grilling with a martini at hand), and enjoy your meal without having to listen to the loud, obnoxious guy at the next table who knows everything about everything, or the crying, screaming kid whose parents seem oblivious to the noise pollution being created. Let the restaurant owners know they have become a little too arrogant and maybe they'll try a little harder to improve things and not take their customers for granted.
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Greed is the engine that has driven up the price of cocktails,(and food) they charge more because they get

away with it. The average diner doesn't even know what a cocktail costs them, there is no reason that a drink

at a bar or restaurant should cost $12 to $16 , some of these "chisler's" charge $2.00 more if you order a drink

straight up instead of over the rocks.They claim it takes more liquor, bull------t.

 

Check liquor prices at the store, no great rise in price, yet these restaurant owners claim they need to pass on the

cost increase even though they buy in bulk & pay wholesale prices. I don't accept this & my defense now is to ask the price of a drink if it doesn't sound "kosher" I pass. They should be required to post prices so that you know what your

being charged, just as they do on a menu.                                  HF

 

May 9, 2013 2:20PM
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Alcohol is huge profit for these casual restaurants in a time when consumers are demanding lower priced lunch and dinner options. Most cocktails have at least a 80% margin on them and subsidize the lower cost of food that many restaurants are starting to offer. So those people who need a drink at dinner are helping the rest of us get cheaper food.
May 9, 2013 10:20AM
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We needed whole article full of facts and figures just to tell us the price of booz is going up?
May 9, 2013 2:26PM
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Has anyone else noticed that Alcohol containers are not required to post nutritional facts? I don't know why they don't have to but water bottle do. They must have excellent lobbyists
May 9, 2013 3:38PM
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Another thievery of the American workers that just want to stop for a beer after work, without blowing a 'Benjamin'.

 

5 bux for a beer Colorado Springs = 2.25 for the same beer in Alamosa, CO.

 

Come on really, how are they supposed to hide that from the Mrs.????

 

LOL

May 9, 2013 2:54PM
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in some atmospheres, price doesn't matter. my son started out as a part-time bar-back while in college. from there, he moved up to become executive chef at a club in a large city a few years later.

 

he left these parts because the patrons were more interested in strong, cold drinks than unique, well prepared dishes.

May 9, 2013 5:20PM
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people, just eat pecan pie.  your life will be complete.
May 9, 2013 5:14PM
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If we are going to drink we just stay at home.  It's a lot cheaper and you don't feel like you have to leave ASAP.  

 

We eat out all the time and we hate that the staff member are shoving the check in your fact before you are even half way done eating.  They say I will  just leave this here for you for when you are done.   If it's not that then they are trying to up sale you with some pie or ice-cream and telling you to leave room. 

May 9, 2013 6:49PM
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If you're outraged by soaring drink prices, here's an idea for you...DON'T DRINK SO MUCH!!!
May 9, 2013 12:54PM
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Did we forget Taxes and Obummercare influence?
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